Fu Hui: Taxes on Vehicles and Revenues

This is the era of income generation.

In this era, known as the transition period, the pursuit of commercial interests has become a portrayal of China's essence. In October 2010, the draft tax for vehicles and boats came up. According to the Chinese government's competent department, the "Plateau Tax Law of the People's Republic of China (Draft)" will impose taxes on cars (ships) in accordance with seven levels. The tax rate ranges from 210 yuan to 4,500 yuan.

This tax is measured in terms of the vehicle's displacement. The higher the displacement, the higher the tax payment. This standard is completely inconsistent with the real situation of the Chinese automobile market. The most direct consequence of this is a deadly blow to Chinese automakers. Now, the market dilemma faced by Chinese automakers is that the gold content of the brand is too low. Many Chinese automakers have made various attempts for this purpose, but few successful manufacturers have entered the mid-level or above market segments. Case. The same product with a displacement of 2.0L has an average price difference of about 80,000 yuan between the prices of domestic automakers and multinational auto companies. This difference increases as the displacement increases.

If this policy formally enters into the implementation level, the profits of Chinese domestic auto makers are better than none. While the mid-level and mid-to-high-end products of most Chinese automakers are constrained by sales, their costs have continued to increase, which has once again added to the plight of Chinese automakers. When China spoke of China’s creation, the draft of the vehicle and boat tax dragged back the Chinese automakers to the bottom of cheap competition.

There are still many problems similar to this one, which brings the levy of vehicle and boat taxes back to its roots. What is the real purpose of this draft? Of course, according to the officials of the Ministry of Finance, there are two basic purposes: First, to guide China’s automobile consumption from the perspective of environmental protection; first, to regulate the direction of wealth in society. In fact, this has no purpose at all. It continues the old habits of Chinese cars at the policy-making level.

What's more, in the face of a market with a population of more than one billion people, regulating the contents of the taxation bill for the consumer market is not strong enough. Taking the US automobile market as an example, in the face of political and economic issues such as energy and environmental protection, the United States has also introduced various policies to guide American consumers to abandon their preferences for medium and large-sized SUVs, MPVs, pickups, VANs, etc., hoping that consumers in the United States Can be more keen on more environmentally friendly and economical car-type products, but such attempts are not successful. Even in the ups and downs of the financial tsunami in 2010, the most active sales in the US consumer car market are still the products that American consumers are more enthusiastic about.

When the economic environment changes, consumers will choose from their own perspective. For example, in the 1980s, under the influence of two oil crises, American consumers consciously chose car products. After the crisis, consumers will make new choices. It is too far-fetched to use the vehicle and boat tax to influence the consumer market.

While positioning the car as a property, it is also the same logic that we hope to adjust the gap between the rich and the poor in China through the use of vehicle and boat taxes. It is doubtful that the tax gap between 210 yuan and 4,500 yuan can play a role in the gap between the rich and the poor in China. It ignores the reasons for the gap between rich and poor in China. In this perspective, the tax on vehicles and boats will only increase the burden on car consumers.

In order to establish an international background for the introduction of the tax on vehicles and boats, many experts and the media believe that the developed countries such as the United Kingdom, Germany, and Japan have imposed taxation on vehicles and boats, so China can also levy tax on vehicles and boats. This fact conceals the fact that Chinese auto consumers themselves have already shouldered more taxation than consumers in these developed markets. When commenting on this policy, the official Xinhua News Agency stated that China’s auto consumption market cannot be treated as a Tang Dynasty.

Since the draft tax for vehicles and ships is not even clear about the basic purpose, it will be publicized in haste. Can only explain that it is hidden. In my opinion, the secret is that the introduction of the vehicle and boat tax is just to increase tax revenue. In obsolete terms, it is to generate income. And at the right time, this policy is right with its planners.

In 2010, China's auto production is expected to be around 17.5 million units (this is the analysis of the China Association of Automobile Manufacturers), which completely surpassed the United States to become the world's largest automotive market. In an internal research report with the participation of the Ministry of Finance, it is expected that by 2020, the sales of Chinese automobiles will far exceed 17.5 million vehicles. The great potential of the market is incalculable and the temptation of tax increases.

Income generation will soon become a reality.

Under China, as long as it finds a rationale for policy makers, there will be considerable benefits. It is not terrible to publicize the draft of the tax on vehicles and vehicles. It is in the form of what the rules require and only needs to be implemented.

If this draft is implemented in such a stance, then Chinese auto consumers will also face more "vehicle tax."