On September 26, the Ministry of Finance, the Administration of Taxation and Ministry of Industry and Information Technology (MIIT) released an announcement saying the NEV Purchase Tax exemption will be extended to the end of 2023. The policy is expected to stimulate auto sales and help recover the economy.
On September 26, the Ministry of Finance, together with the Administration of Taxation and the Ministry of Industry and Information Technology (MIIT), released an announcement on the Extension of the Vehicle Purchase Tax Exemption Policy for NEV.
According to the announcement, the tax-exempted NEV should be listed in the Purchase Tax Exemption NEV Catalogue, including EVs, PHEVs and Fuel Cell Cars. The purchase date should be from January 1, 2023, to December 31, 2023. In addition, the cars listed in the Catalog before December 31, 2022, will continue to enjoy the tax exemption.
Since the implementation of the NEV Purchase Tax Exemption policy, the consumption of NEV has been effectively stimulated. According to the Administration of Taxation, the total exempted Vehicle Purchase Tax from January to July this year has amounted to CNY 40.7 billion (USD 5.6 billion) representing a year-on-year growth of 108.5%, of which CNY 7.2 billion was exempted in July, up 119.1%.
At present, the auto industry maintains an upward development trend. Vehicle consumption driven by policies and markets will continue to spur the auto industry's development and help to repair the economy.