China leverages tax tool to promote green vehicles, ships

BEIJING - The Ministry of Finance (MOF) announced Wednesday that China will promote the use of environmentally friendly vehicles and ships by offering tax cuts.

Beginning at the start of the year, the country has decided to halve vehicle taxes for users of energy-saving cars and ships, according to a government document posted Wednesday on the MOF's website.

Vehicle taxes for users of new-energy cars and vessels will also be removed, according to the document.

The State Administration of Taxation said late last year that the newly-adjusted Vehicle and Vessel Tax Law, effective January 1, will levy moderately higher taxes on passenger vehicles with an engine size between 2 and 2.5 liters, as well as much higher taxes on those with an engine size above 2.5 liters.

China overtook the United States as the world's largest auto market in 2009 after selling 13.64 million vehicles that year.

Both car sales and production volume witnessed astonishing growth in 2009 and 2010 before slowing to a 2.4-percent growth in 2011 with the conclusion of stimulus policies.

China remains the world's largest auto market. Car sales last year hit 18.5 million units.