One of the reasons why the automobile industry has been paid more attention to by the local government is that China has imposed a tax on the production of cars. Once a car factory has landed in a place or expanded its production capacity, it has made a great contribution to the local tax revenue.
According to preliminary statistics, the local government can get 21% of the tax revenue from the automotive sector, the use of links to get a tax of 7%. This heavy production link, the use of light tax system exacerbated the local demand for local production.
In the developed country, on the contrary, the automobile industry tax, purchase tax for the overall tax of 30%, link and maintain and application to account for 70%, so these countries at all levels of government is more support in local sales rather than in the local production.
In China, including VAT, consumption tax, vehicle purchase tax in the automotive purchase part of the tax, in the use of links only travel taxes and refined oil consumption tax, and are very low. It is recommended to gradually improve the use and maintenance of vehicle tax burden, reduce production and purchase tax burden, thereby weakening the local introduction and protection of local enterprises.
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