On August 27, the Law of the People's Republic of China on Vehicle Purchase Tax (Draft) was submitted to the Standing Committee of the National People's Congress for deliberation. According to the draft regulations: Units and individuals who purchase motor vehicles, motorcycles, trams, and trailers with a displacement of more than 150 ml in the territory of the People's Republic of China are taxpayers who purchase taxes for vehicles. Vehicle purchase tax is subject to a levy system. Vehicles that have purchased vehicle purchase tax are not subject to vehicle purchase tax. The vehicle purchase tax rate is 10%, which is consistent with the current tax rate.
This means that motorcycles with a displacement of 150ml or less will no longer be subject to the purchase tax and will be exempt from purchase tax.
In 2017, China produced and sold about 17 million motorcycles, and about 14 million motorcycles with 150ml and below, accounting for 82% of total motorcycle production and sales. This is a major positive news for the motorcycle industry this year. The 150ml and below displacement motorcycles are mainly used for urban and rural residents to travel and express transportation. They have a vast market in China and are an important tool to alleviate urban traffic congestion and promote the development of the logistics industry. Implementation of the 150ml and below displacement Motorcycle purchase tax reduction will reduce the cost of car purchases, drive motorcycle sales, slow down the impact of the "national four" implementation on the industry's rising costs, and promote the smooth transformation of the motorcycle industry.