China planning to levy tax on vehicle emissions

(chinatrucks.com, Jan.28, 2010)China is mulling an eco-friendly plan to levy tax on emissions produced from vehicles, according to an official with Beijing city's economic planning agency, the Beijing News reported today.

"The central government has started its research on the environmental tax reform, including a plan to tax vehicle owners according to emissions of their vehicles," said Zhang Yanyou, deputy head of Beijing Municipal Development and Reform Commission.

For example, owners of vehicles equipped with a large-size engine will certainly pay more tax than owners of vehicles equipped with a small-size engine, which is similar to the car purchase tax.

"The more distance your car covers, the more you will pay," said an official with China's Ministry of Environmental Protection, cited by China Daily.

If the scheme takes effect in future, buyers of higher-emission vehicles will pay more tax. When and how the taxation will be conducted is not known yet.

China has overtaken the U.S. as the world's biggest auto market, with sales surging 46% last year to 13.6 million vehicles, which may cause more environmental concerns.

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