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Zhejiang may raise car buying threshold

  • Source: Gasgoo
  • [14:29 January 17 2011]
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"Only businesses or individuals paying over 50,000 yuan of taxes annually should be allowed to purchase a vehicle," said Zhejiang Provincial Committee member Zhou Jianqiao.

In his "proposal regarding how to resolve traffic congestion problems" submitted to the fourth session of the 10th Provincial People's Congress, Mr. Zhou states that the reason behind the current levels of traffic congestion is the rapid increase in the number of privately-owned automobiles, advocating that tax evaders and others who do not pay tax be prohibited from purchasing a car. "Those who] do not supply taxes to the state, yet give the state additionally burdens, should not be allowed to purchase a vehicle," he said.

Meanwhile, Mr. Zhou suggested that buying cars be limited to businesses and individuals paying at least 50,000 yuan ($7.590) in taxes annually.

Why set a 50,000 yuan tax threshold? Mr. Zhou basis his calculation on an individual tax rate of 20%. According to his logic those paying at least 50,000 yuan in taxes have an annual income of over 250,000 yuan ($37,950). "To buy a mid-class car right now, including paying related operating expenses requires around 200,000 yuan ($30,360).

However those who buy economically priced vehicles occupy the same public resource costs—such as roads, parking lots, etc. —as everyone else," he said. "In order to rectify the traffic congestion problems, (we can) only raise the restrictions on purchasing vehicles, limiting the number of cars being sold, as well as providing measures to encourage increased public transportation usage."