BEIJING Dec 15 China's Ministry of Finance said
on Thursday it will extend a tax cut on small-engine vehicles to
2017, keeping the purchase tax below its normal 10 percent.
The purchase tax rate for vehicles with 1.6-litre engines or
below was reduced to 5 percent in October 2015 as a way to
stimulate demand for cars and kept at the same rate throughout
The Ministry of Finance said in a statement posted on its
official website that the rate will go up to 7.5 percent from
the beginning of next year but will still be below the normal
rate of 10 percent.
The ministry said it plans to levy the normal 10 percent tax
on small-engine cars starting on Jan 1, 2018.
Earlier this week an official at the China Association of
Automobile Manufacturers (CAAM) told reporters that China's
overall automobile sales could increase 13 percent this year
Auto industry officials and experts attribute much of that
relatively strong growth to the purchase tax cut on small-engine
(Reporting By Norihiko Shirouzu; Editing by Muralikumar