China Ends Sales Tax Waiver for 1,882 NEV Models

China Ends Sales Tax Waiver for 1,882 NEV Models

Li Suwan

Date: Wed, 05/23/2018 - 19:14 / source:Yicai
China Ends Sales Tax Waiver for 1,882 NEV Models
China Ends Sales Tax Waiver for 1,882 NEV Models

(Yicai Global) May 23 -- China has unveiled a list of 1,882 new-energy vehicle models no longer eligible for a sales tax waiver as it looks to avoid manufacturers making phony claims and cut local government spending.

The Ministry of Industry and Information technology published the list online yesterday. Some top domestic makers, such as BYD Co., Beijing Automotive Group Co. and Jianghuai Automobile Co. were among those whose cars were listed, though BYD told Yicai Global that its disqualified cars were no longer in production or on sale.

“The government introduced a series of incentive policies, but some carmakers abused them and some even made false claims to get them,” auto industry analyst Sun Muzi told Yicai Global in an interview. He believes that the purchase tax will be further tightened and may be abolished altogether in future.

“The NEV industry will shift away from policy orientation toward market-based operations, and the days when NEV makers could rely on subsidies may come to an end earlier [than expected], because some local governments can no longer afford the expenses,” he added. He predicts that subsidies will drop massively next year, but added that cars not on the list of vehicles ineligible for tax waivers will remain unaffected until 2020.

Editor: James Boynton

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Keywords: Electric Vehicle, government subsidy reduction, Purchase Tax Exemption