BEIJING - China is considering linking a vehicle tax to engine emissions levels, and levying the charge directly on car owners, in a bid to clean up its smog-plagued cities, the China Daily reported on Monday.
Under the new regime, the tax burden on cars with an engine capacity over 3.0 litres could be as high as 15 to 20 percent, the paper quoted Feng Fei, director of the industry department at the State Council's Development and Research Centre, as saying.
At present, a 3 to 8 percent tax was paid by manufacturers before cars entered the market, the paper said.
"Those who buy cars with higher emissions will be taxed more heavily," Feng told China Daily in an interview.
"We suggest that tax be levied on car buyers directly; this will encourage them to consider more economic vehicles with lower emissions."
The centre predicts that cars will account for around 43 percent of oil consumption -- or 138 million tonnes -- by 2010, rising to 256 million tonnes, or 57 percent, by 2020.
Feng added that the move would not dent the development of the country's car market, which has seen flagging sales in recent months.
Analysts say China may also be considering a fuel tax to promote energy conservation and environmental protection but is wary of bringing it in at a time when record-high international oil prices are already creating domestic tensions.
China's refiners, trapped between rising global crude markets and government-capped retail prices which are among the world's lowest, are clamouring for higher fuel prices as they struggle to turn a profit.
But even though Beijing upped its diesel and gasoline price limits by up to 4.5 percent on Saturday, officials are wary of stirring social unrest by increasing drivers' costs.
A cartoon in the China Daily on Monday showed a sweating owner rolling her car away from a petrol station thinking: "Another price hike. Oh well, at least if I push the car I'll get some exercise."
REUTERS NEWS SERVICE
