China abolishes taxes on vehicle tires

Beijing - China has abolished consumption taxes on vehicle tires, including a 3-percent tax for bias tires and a 10-percent tax for other tire types.

The abolition, as of 1 Dec. 2014, can help China's tire manufacturers grow, said Cai Weimin, former secretary-general of China Rubber Industry Association's tire sub-commission.

The move, the CRIA official added, will allow Chinese tire makers put more resources into technical upgrades at their facilities.

China started imposing vehicle tire consumption taxes at a 10-percent rate across the board in 1994. The tax on radial tires was scrapped in 2001, and that on bias tires reduced to 3 percent in 2006 and on tractor tires revoked in 2010.

"It was a tax policy for China's transitional period from planned economy to market economy, and is no longer suitable for today," commented Weimin.

Current tire sub-commission secretary-general Shi Yifeng told ERJ: "I don't think the timing of this tax policy is relevant to the US anti-dumping tariffs or should be interpreted as encouraging domestic consumption. It is simply correcting an outdated policy."