China's top legislature is reviewing a draft law on vehicle and vessel tax. It could mean less tax on clean energy cars, and more on those with higher emissions.

Currently, the tax on passenger vehicles in China ranges from 360 yuan to 660 yuan. But the new draft law sets out provisions for reducing taxes on energy-saving and clean energy-powered vehicles, while imposing higher taxes on cars with big engines. Chinese Finance Minister Xie Xuren made the proposal clear, at a bimonthly legislative session.

Xie Xuren, Minister of Finance sadi "Taxes on vehicles with engines smaller than 1.6 liters will be reduced slightly or be left unchanged. Taxes on cars with engines bigger than 1.6 liters but smaller than 2.5 liters will see a moderate increase in taxes. Taxes imposed on cars with engines larger than 2.5 liters will experience a relative large increase."

According to the draft law, taxes on vessels will remain unchanged while taxes on motorcycles, three-wheel motor vehicles and low-speed trucks mainly used in rural areas, will be reduced or remain unchanged. The draft law also stipulates that owners of energy-intensive and highly polluting cars and vessels, will have to pay more tax.

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