Abstract:

Automotive industry acts as a pillar industry in national economy and plays a key role in China’s manufacturing industrial upgrading. Meanwhile, taxation is the essential economic leverage for the government to impose macro-control over the market. China’s tax scheme on domestic automotive industry was examined thoroughly and the corresponding impacts were analyzed through case study, scenario analysis and international comparison. It was found that China’s automotive tax scheme has inadequate influence on the market concerning energy conservation and emission reduction, with limited incentives posed to low-engine-displacement vehicles. Besides, automotive tax is over-assigned to producing and purchasing phases and tax revenue distribution pattern is not reasonable as well. Therefore, adjustment in automotive tax scheme is of vital importance in the future to pursue a sustainable development. It is suggested and prospected that China’s automotive tax scheme be reformed in several aspects, including giving more preferences to low-engine-displacement vehicles, balancing taxes well in different phases, putting principles of ‘ownership encouraged and usage reasonable’, ‘earmarking taxes’ and ‘beneficiaries burden’ into practice.