China to Raise Tax on Smaller Cars to 7.5% Through 2017: Sources
- Tax was halved to 5% from 10% in October 2015 to spur demand
- Sales growth may moderate to 3% in 2017 from 15% this year
Vehicles move along a road in Shanghai, China.
Photographer: Tomohiro Ohsumi/BloombergThis article is for subscribers only.
China will raise the sales tax on small cars to 7.5 percent, curbing an incentive that has propped up the auto industry, which is heading for its 26th consecutive annual expansion, according to people familiar with the matter.
The tax rate is less than the 10 percent originally scheduled to take effect from January. However, it is an increase from the 5 percent rate introduced in October 2015. Shares of carmakers fell.