Securities Times reporter Guo Bohao
The recent executive meeting of the State Council pointed out that it is necessary to continue and optimize the new energy vehicle purchase tax reduction policy, further stabilize market expectations, optimize the consumption environment, and release the consumption potential of new energy vehicles. With this setting, the purchase tax exemption policy for new energy vehicles will be extended for the fourth time.
Experts interviewed said that although the vehicle purchase tax reduction policy reduces the relevant tax revenue in the short term, it will drive the development of the automotive industry chain and tax contribution in the long run. The continuation of the new energy vehicle purchase tax policy once again stabilizes the expectations of car companies and consumers, and is more conducive to promoting the development of the new energy vehicle industry.
In addition, the interviewed experts suggested that in addition to extending the new energy vehicle purchase tax reduction policy, further attention can be paid to the reform of automobile consumption tax. Fully consider the differences of different models, and through relevant policy optimization, while promoting automobile consumption, guide social consumption to transform from fuel vehicles to new energy vehicles step by step.
The purchase tax exemption policy works
In order to promote the development of the new energy vehicle industry, China has exempted new energy vehicles from vehicle purchase tax since September 2014, and since then the policy has been extended three times in 9, 2017 and 2020. According to the China Automotive Strategy and Policy Research Center, after the implementation of the policy, it will form a synergy with the new energy vehicle purchase subsidy policy, greatly reduce the purchase cost of new energy vehicles, and effectively help China's new energy vehicle industry gain a first-mover advantage.
With the support of relevant policies, China's new energy vehicle sales have shown a rapid upward trend in recent years. According to data from the China Association of Automobile Manufacturers, from 2017 to 2022, China's new energy vehicle sales increased from 77,7 to 688.7 million, a year-on-year increase of 786.4%. In the past two years, the high increase in sales of new energy vehicles has also hedged the impact of the decline in sales of fuel vehicles, so that the overall sales of vehicles in 2021 and 2022 have reversed the downward trend since 2018.
Cui Dongshu, secretary general of the Passenger Association, said in an interview with the Securities Times that with the expansion of the scale of new energy vehicles, the tax-free amount of new energy vehicles this year will exceed 1000 billion yuan. If the policy continues, the exemption in 2025 is expected to approach 2000 billion yuan. At that time, the exemption from purchase tax will be much greater than that of new energy subsidies, which will play a huge role in promoting the development of new energy vehicles.
Sun Kunpeng, associate professor of the School of Finance and Taxation of the Central University of Finance and Economics, also pointed out to reporters that although the vehicle purchase tax reduction and exemption has reduced China's tax revenue in the short term, especially in some large automobile consumption provinces, the impact is relatively greater; However, in the long run, the reduction of automobile purchase tax will bring about the development of the automobile industry chain and tax contribution, so its impact is not necessarily negative.
The purchase tax policy will be optimized
This year's government work report proposed that efforts should be made to expand domestic demand, give priority to the recovery and expansion of consumption, and stabilize bulk consumption such as automobiles. The automobile industry is a strategic and pillar industry of the national economy, and the development of the automobile industry plays an important role in promoting economic growth and stabilizing employment.
Cui Dongshu said that the purchase tax exemption policy is directly reflected in the purchase of cars, and the consumer perception is high, which has obvious effects on promoting the consumption of new energy vehicles. According to data from the State Administration of Taxation, in 2022, China will be exempted from new energy vehicle purchase tax of 879.92 billion yuan, a year-on-year increase of 6.212%. In the first quarter of this year, the amount of vehicle purchase tax exemption reached 4.36 billion yuan, a year-on-year increase of 125%, and 7.1 million new energy vehicles in the country enjoyed preferential policies, with an average tax exemption of about 69,<> yuan per vehicle.
Cui Dongshu pointed out that the continuation of the new energy vehicle purchase tax policy once again stabilizes the expectations of car companies and consumers, and is more conducive to promoting the development of the new energy vehicle industry.
It is worth mentioning that the recent National Council proposed to extend the new energy vehicle purchase tax reduction policy, but did not disclose the extension period. In this regard, Sun Kunpeng believes that the specific duration of the new energy vehicle purchase tax reduction depends on the development speed of China's new energy vehicle technology and industry, fuel vehicle tax policy, financial affordability, etc. In general, with the gradual maturity of China's new energy vehicle industry, the decline of new energy vehicle related tax reduction policies is the general trend, and related industries need to participate in international competition and contribute more to fiscal revenue.
In addition to extending the new energy vehicle purchase tax reduction policy, relevant policies will also be optimized. In this regard, Cui Dongshu suggested that the tax incentives for transitional products such as plug-in hybrids and extended-range electric vehicles should be gradually reduced, so that tax incentives can focus on the development of pure electric models.
Tax incentives for fuel vehicles are still necessary
Due to the large number of ownership and the shift of new demand to new energy vehicles, the sales of fuel vehicles have been declining for many years. According to data from the China Association of Automobile Manufacturers, from 2017 to 2022, China's fuel vehicle sales fell from 2810.2 million to 1997.7 million units, a decrease of 28.9%.
Nevertheless, according to 2022 data, traditional fuel vehicles still account for more than 70% of the automotive market. Cui Dongshu believes that the introduction of new preferential tax policies for fuel vehicles to promote the consumption of fuel vehicles is of great significance for stabilizing bulk consumption such as automobiles.
In fact, for promoting the consumption of traditional fuel vehicles, the effect of relevant tax preferential policies is immediate. Judging from the performance of the fuel vehicle market last year, in the first month of the implementation of the purchase tax halving policy in June 2022, fuel vehicle sales grew rapidly from 6,4 units and 5.98 million units in April and May last year to 6.167 million units.
Sun Kunpeng believes that whether the preferential tax policy for fuel vehicles is withdrawn or not depends on the degree of economic recovery and development momentum, and at present, it is still necessary to maintain the preferential tax policy for fuel vehicles.
"As a people's livelihood model, fuel vehicles still have certain advantages over new energy vehicles in terms of price and usage scenarios. At present, fuel vehicles are still an important choice for working families in non-restricted cities. Cui Dongshu suggested that new preferential policies should be introduced for fuel vehicles below 20,<> yuan to lower the threshold for relevant people to buy cars.
"In addition to the vehicle purchase tax, further attention can be paid to the reform of the automobile consumption tax." Sun Kunpeng believes that under the current automobile consumption tax policy, there is no difference in the consumption tax rate levied by new energy vehicles and traditional fuel vehicles, and its differences can be further considered, on the one hand, to promote the consumption of fuel vehicles, on the other hand, to promote the gradual transformation of social consumption from fuel vehicles to new energy vehicles.