The New Deal of Taxation on Car Prices Increases Car Taxes

Core tips:

The State Administration of Taxation intends to impose a purchase tax on car purchase fee increases, which will increase the tax burden on already very heavy cars.

Car owners who increase their car prices may increase purchase tax expenses. The State Administration of Taxation drafted a preliminary draft of the "Administrative Measures on Collection of Vehicle Purchase Taxes." The revised draft intends to uniformly invoice the addition fees, decoration beauty fees, and fare increase fees for car purchases. ("Beijing Times" August 5)

Such a new policy of taxation for “taxes on car purchases and fee increases” is undoubtedly deeply frustrating and unreasonable. On the one hand, in addition to the regular car prices, it is unreasonable and unreasonable to collect a “car purchase fee increase fee”. The taxation department taxes such an act. Whether or not it recognizes it, it will in fact produce a disguised form of recognition of this behavior. Suspected. On the other hand, for consumers, the actual effect of "taxation of fare increases" must be "increase the price on the basis of fare increases", and ultimately increase the financial burden on the car buyers. The “decorative beauty fee” and other types of fees that consumers choose when buying a car are also taxed in the name of “vehicle purchase”. From a formal point of view, it also appears to be less rigorous and reasonable—the “decorative beauty” of automobiles. Must it belong to the category of vehicle purchase?

From a more macro perspective, the “levying taxes on car purchase fees” has once again aggravated the already heavy car tax burden. As we all know, at present, China’s automobiles are the most heavily taxed commodities – such as value-added tax at the production stage, purchase tax at the purchase stage, vehicle tax at the holding stage, and fuel tax during use (oil product consumption tax). In addition to this, there is the consumption tax of the automobile itself and the tariff of the import link. It is precisely because of the heavy tax burden on the automobile that the price of the same model is generally higher than that of foreign countries.

Specific to the "vehicle purchase tax", even if no tax increase, the tax has also grown rapidly. According to the “Structural Analysis of Tax Revenue Growth in 2010” of the Ministry of Finance, “the vehicle purchase tax realized revenue of 179.203 billion yuan in 2010, an increase of 54.0% year-on-year”. At this time, the tax department is still obsessed with not forgetting to levy a tax increase fee. Is there any suspicion that "mosquito legs are tickling the meat"?

Needless to say, the predecessor of the “vehicle purchase tax” was originally the “vehicle purchase surcharge”, and the purpose of the latter’s collection was based on the original requirement that “in order to speed up highway construction, it is a special source of funds for highway construction”. Now, however, the purchase tax has continued to grow at a rapid rate. However, on the highways, there are still toll booths under the banner of “loans for roads and fees and loans”. Since there are so many “loan-charges” for highway construction, why again? There must be a higher purchase tax. Is it suspected of "double taxation"?

In the first half of this year, China’s fiscal revenue was 5.687582 trillion yuan, a year-on-year increase of 31.2%. In the same period, GDP grew by 9.6% year-on-year, and the per-capita disposable income of urban residents actually only increased by 7.6%. This is still the case of the “rich countries and poor people”, and the established goal of “income of residents growing at the same pace as economic growth” has not been achieved.

Under such a background of income distribution, the “taxation of car purchase fees” is undoubtedly extremely inappropriate, and is full of “marketing for the people” instead of “letting interest in the people”. The ancients once warned, "How do you use it, use it as mud?" Isn't it worth the financial and taxation departments to think deeply?



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