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Vice Minister of the Ministry of Industry and Information Technology: Car Purchase Tax May be Further Decreased

Source: Author£ºadmin Hits£º9411 Time£º2009/7/6 10:07:51

Miao Xu, Vice Minister of the Ministry of Industry and Information Technology of China said when receiving interview that car purchase tax may be further lowered, depending upon market situation in the future, the part for central enterprises from special fund worth 10 billion yuan for technical reconstruction of automobile enterprises as specified in the plan for adjusting and reinvigorating automobile industry will be examined and approved in the near future; He also suggested that the Ministry of Industry and Information Technology had launched efforts to formulate guidelines for pushing ahead with enterprise restructuring which would be promulgated at latest by the end of this year.

Car purchase tax may be further reduced.

According to Miao Xu in 2009 Shanghai International Auto Show Summit, the production and sales in the automotive industry are expected to recover in the first quarter this year mainly due to being driven by the market with such driving effect continuing. Measures for further decreasing car purchase tax will be studied and promulgated, depending on the developments in market in the future.

Chinese automotive market has suffered negative growth since the third quarter last year with appreciably decreasing exports. In the first quarter this year, automotive market witnessed the end of decreasing trend occurring last year, 2.5676 million and 2.6788 cars were produced and sold respectively, up 1.91% and 3.88%. According to Miao Xu, the recovery of car sales and production was not completely driven by policies and was primarily attributable to vast market; the policies for making cars accessible by the buyers in rural areas had not yet kicked in, car sales and production were mainly driven by the market, such effect would sustain.

The Ministry of Industry and Information Technology would closely follow the effect of implementation of various policies and make necessary timely adjustments according to the market developments to ensure sweeping recovery of industries in the future, said by Miao Xu. After the Summit, he made a briefing to media including National Business Daily that the possibility of studying further measures is not excluded if the release of demand for this time period is followed by market slump; if the market performs well, it is not necessary to take measures.

Special fund for technical reconstruction will be approved in the near future.

With respect to technical reconstruction and independent innovations of automobile enterprises, Miao Xu believed that currently it was well-timed to launch technical reconstruction conducive to not only enabling investment expansion but also laying a solid foundation for the development in the next period.

The plan for adjusting and reinvigorating cars has been outlined. The Central Government will earmark 10 billion yuan of special fund to support technical reconstruction and advancement of automobile enterprises and the development of new energy cars and special auto parts in the future three years. According to the information from Miao Xu in the Summit, the special fund for technical reconstruction of local enterprises has been approved by official reply last week and the work on organizing technical reconstruction projects of central enterprises will also be launched in the near future.
After the Summit, he emphasized that special fund is mainly dedicated to technical reconstruction of enterprises and encouragement of adopting new and energy-conserving and environment-protective and safety technology rather than expansion of production capacity. Central and local enterprises can apply for discount and loans, regardless of enterprise ownership and scale, if only conditions are satisfied.

Guidelines for the restructuring of automobile enterprises will be promulgated at latest by the end of this year.

Currently, the Ministry of Industry and Information Technology has launched the work on formulating guidelines for promoting enterprise restructuring and is accelerating the steps to study and promulgate policies and measures for the merging and restructuring of enterprises including those in automotive industry and is pushing forward the move to properly address the issues concerning placement of redundant production personnel, transfer of enterprise assets, the checking, ratification and disposal of debts and supports automakers to integrate product resources through merge and restructuring to sharpen their competitive edge.

After the Summit, Miao Xu said currently 90% of production volume came from fourteen enterprises in China which would be decreased to ten enterprises or below by 2011. He also revealed that specific guidelines for restructuring were studied by the Ministry of Industry and Information Technology in conjunction with other relevant ministries and would be promulgated at latest by the end of this year.

According to Miao Xu, some progress was previously made, but restructuring came with many problems and difficulties such as how to allocate and rationally specify income tax in the case of transregional restructuring. We were studying what policies should be adopted to encourage enterprise merge and restructuring and increase the degree of concentration and enhance enterprise capacity and raise the intensive level to better smoothen restructuring.