Gasgoo.com (Shanghai December 19) - The new Vehicle and Vessel Tax Law of the People's Republic of China will go into effect starting January 1 next year, the Securities Journal reported today. The State Administration of Taxation held a conference answering questions on the taxation yesterday, during which representatives stated that new energy vehicles would be exempt from the policy.

According to the new legislation, automobiles or vessels carrying nine or less people will be taxed according to size of engine emissions, a departure from before when taxes were determined solely by number of people transported.

SAT officials calculated that the new policy would not increase taxes for around 87 percent of passenger vehicles currently in use. The policy would most affect the 13 percent of vehicles with engine sizes of over 2.0 L, whose owners would see an increase in taxes. Among them, the three percent of vehicles whose engines are larger than 2.5 L would see a relatively large increase in taxes.

SAT calculations show that 28 percent of trucks, motorcycles and vessels would be taxed the same as before. Buses carrying over nine people would see a slight increase in taxes, while a new method would be used to compute taxes for ships.

According to SAT representatives, the new policy would help promote use of new energy and emission reducing vehicles, with the State Council's financial and tax divisions having already approved the exemptions. The policy would also aid agricultural workers, whose primary choice of vehicle, the motorcycle, would see tax rates decrease or stay the same.