Planned fuel tax unlikely to hurt motorists

PUBLISHED : Monday, 24 January, 2005, 12:00am
UPDATED : Monday, 24 January, 2005, 12:00am

A fuel tax due to be introduced soon is not expected to cost motorists more, state media reports say.

Instead, the tax will replace the current road construction fee, according to a National Development and Reform Commission report, quoted by Xinhua yesterday.

'[The fuel tax] will not add to the burden of [road] users and hence will not suppress the excessive demand for fuel oil,' the report said.

The commission said the authorities were waiting for the right opportunity to announce the tax, which was mainly aimed at conserving energy. Without divulging details, the commission said the tax would help to promote diesel-powered vehicles.

It gave hints of more favourable terms for low-emission vehicles, saying the tax would gradually 'clear the obstacles' for the development of low-emission cars as a 'more economical and energy-saving' commodity.

The tax will follow a report released by the commission last November, which called for a more rapid elimination of heavy-emission vehicles as a long-term energy conservation measure.

Beijing has been studying the new tax law for the past few years.

Earlier this month, the chief of the State Administration for Taxation, Xie Xuren, said the government was waiting for the right time to announce the tax. He cited high oil prices as a reason for postponing the announcement.