China will scrap the vehicle purchase tax for alternative energy cars from Sept. 1 as part of its efforts to promote green car sales and cut air pollution, the Shanghai Securities News reported on Thursday, citing a State Council announcement.
Buyers of purely electric, plug-in hybrid and fuel-cell vehicles, whether produced domestically or imported, will be exempt from the 10 percent purchase tax, the report said, adding that the tax break will last until 2017.
The cabinet has ordered relevant government agencies to release as soon as possible a directory of car models covered by the tax exemption.
Meanwhile, the newspaper quoted an unnamed source as saying that government will soon announce subsidies for recharging stations.
BYD Auto Co. Ltd. (002594.CN) and Zhengzhou Yutong Bus Co. Ltd. (600066.CN) are expected to benefit from the move.
China started a program to promote alternative vehicles in 2009, aiming for the sale of 500,000 units by 2015. So far, however, only 70,000 green cars have been sold as the lack of recharging networks and insufficient stimulus measures discourage car buyers.
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