Ministry of Industry and Information Technology: Efforts are Stepped up to Study the Extension of the NEV Purchase Tax Exemption Policy

SHANGHAI, Jul 22 (SMM) –  On July 19, at the press conference on the development of industry and information technology for the first half of 2022, the spokesperson of the Ministry of Industry and Information Technology (MIIT) said that the State Council attached great importance to the exemption of vehicle purchase tax on new energy vehicles (NEV), and that relevant departments were studying the extension of the policy after it expiredand and would clarify the NEV purchase tax preferential policy as soon as possible. Earlie on July 7, 17 departments including the Ministry of Commerce, MIIT, and the National Development and Reform Commission issued the Notice on Several Measures to Revitalize Automobile Circulation and Expand Automobile Consumption. The Notice pointed out the importance of the extending the NEV purchase tax exemption policy after it expires. Moreover, atthe regular meeting of the National Assembly on June 22, it was also mentioned that that the consumption of NEVs should be supported by extending the policy of exempting purchase tax on NEV after it expires. 

The NEV purchase tax exemption was proposed in 2014 to promote the strategic transformation of China's transportation energy, advance the construction of ecological civilization, and support the development of NEV industry. Public information shows that the NEV purchase tax exemption policy has been extended twice before. It first expired in 2017 and was extended, while the second extension occurred in 2020 to stimulate automobile consumption, which was hit by the breakout of the pandemic.

The NEV purchase tax exemption policy has been boosting the sales and consumption of NEVs for a long time. “NEV purchase subsidy and purchase tax exemption policy play an important role in advancing the technological progress of NEV, contributing more than 60% of its development.” said Liu bin, a chief expert at China Automotive Technology&Research Centre Co. Ltd. At present, China's new energy vehicles industry is undergoing rapid development. The extension of the NEV purchase tax exemption policy is expected to help increase the penetration rate of NEVs and may help to fulfill the 2025 target of 25% of NEVs in the market share in advance.