Year:2006 (amended 2008)
Policy status:In Force
Date Effective:2006 (amended 2008)
Policy Type:Economic Instruments>Fiscal/financial incentives>Tax relief
Policy Target:Transport, Framework/ Multi-sectoral Policy
Agency:State Administration of Taxation

The National Development and Reform Commission established mandatory fuel efficiency standards for passenger cars in 2004.

The standards were implemented in two phases: Phase 1 took effect in 2005 for passenger vehicles and Phase 2 in 2008 for light-duty vehicles. The standards classify vehicles into 16 categories based on vehicle weight. Standard values are set for each category. In addition, there are different standard values for manual transmissions and automatic transmissions. Manufacturers must get the vehicle type they want to market certified to comply with the standards. The standard values are maximum allowable limits for each vehicle type, not the limits for the fleet average of the categories.

Excise tax rates for vehicles have been proportional to the size of car engines since 1994.

  • The rate for cars with engines 1.0L or less was set at 3%, for engines over 4.0L it was 8%, and for engines in between the rate was 5%.
  • As of 1 April 2006, the range of excise tax rates for vehicles was broadened to 3-20%.
  • Rates for small cars with engines between 1.0 and 1.5L decreased to 3%, for engines from 1.5 to 2.0L they remained at 5%, while for engines between 2.0 to 4.0 the rate increased to between 9% and 15%.
  • For engines over 4.0L, the rate nearly doubled from 8% to 20%.
  • On 1 September 2008, the excise tax rate for engines 1.0L or less further decreased to 1%, while for engines from 3.0 to 4.0L it increased to 25%. The rate for cars with engines over 4.0L increased to 40%.

Last modified: Mon, 22 May 2017 10:46:35 CEST