A Study On The Effect Of Two Tax Preferential Policies For Vehicle Purchase Tax

The global financial crisis of 2008 has caused a certain impact on China's economy.The growth rate of passenger cars in China has also dropped significantly compared with that in previous year.In order to increase the sales volume of passenger cars and cope with the economic recession caused by the financial crisis,China implemented the preferential policies for passenger cars with displacements of 1.6L and below for the first time from January 20,2009 to December 31,2010.The purchase of low displacement vehicles is halved vehicle purchase tax(or 7.5% is the tax rate).Obviously,the purpose of this preferential policy is to increase the sales volume of small-displacement vehicles in the country by using the “tax reduction effect” of the vehicle purchase tax preferential policy to cope with the impact of the 2008 financial crisis on China's automobile market.With the rapid development of China's automobile market,the exhaust gas emitted by automobiles has become one of the main sources of air pollution,and even become the core pollution source of air pollution.According to relevant statistics,22% of China's PM emissions come from automobile exhaust emissions,and the proportion of first-tier cities has reached 25%.The smog weather that broke out many times in the central and eastern regions of China in 2013 caused the state to pay attention to atmospheric protection work.In order to alleviate the air pollution caused by automobile exhaust,China has implemented the preferential policy for passenger cars with a displacement of 1.6L and below from October 1,2015 to December 31,2017,which is also the purchase of low displacement.The vehicle's behavior is halved vehicle purchase tax(or 7.5% is the tax rate).At this time,the state realized the importance of atmospheric protection.The purpose of this preferential policy is not only to re-apply the “tax reduction effect” to restore the rapid growth of the past,but to promote the development of the small-displacement automobile market and guide consumers from Large-displacement vehicles turn to small-displacement vehicles,and use the “environmental protection effect” of preferential policies to achieve the goal of reducing vehicle exhaust emissions.The policy objectives of the two tax incentives are different,what is the policy effect? Has the policy goal been achieved? In this regard,this article has carried out a series of studies.First of all,this paper studies the tax reduction effect of the first preferential policy in the country by using the difference-in-differences(DID)method as the indicator of the increase in the annual sales volume of small-displacement passenger cars.The results show that the first tax reduction policy of vehicle purchase tax has significant tax reduction effect,which greatly improved the overall sales volume of small-displacement vehicles in the country and the proportion of small-displacement vehicles in total passenger vehicle sales,and successfully responded to the 2008 global financial crisis for China.The impact of the economy,especially the automobile market,has reached the goal of policy formulation.In addition to applying the “tax reduction effect” again,the second preferential policy also has the effect of using the “environmental effect” of preferential policies to reduce vehicle emissions.In this regard,this paper firstly applies the DID method to study the tax reduction effect of this preferential policy nationwide,and finds that the tax reduction effect of the second preferential policy is still significant,but the degree of tax reduction effect relative to the first preferential policy had weakened.Then,using OLS method,the proportion of cities with average annual concentration of PM2.5 exceeding the national secondary standard and the proportion of cities with daily average CO concentration exceeding the national secondary standard are selected as indicators to analyze the environmental protection effect of the second preferential policy nationwide.The result shows that the increase in sales of small-displacement passenger cars across the country can reduce the proportion of cities in the country where the average concentration of certain pollutants exceeds the national secondary standard.Due to the regional differences in the tax incentive effect,this paper applies the double difference method to study the tax reduction effect of the second vehicle purchase tax preferential policy,and finds that the second preferential policy is in Ningxia Autonomous Region,Qinghai Province,Gansu Province,etc.The tax cuts were significant in 25 other regions outside the six regions,and the extent of tax cuts in these regions,although different,met the expectations of policymakers.Then,using descriptive statistics to examine the environmental effects of the second preferential policy in different regions,the results show that the tax incentives for the same tax have different environmental effects in different regions.On the basis of adhering to the principle of energy conservation and environmental protection,the paper puts forward some suggestions for the formulation of future vehicle purchase tax preferential policies:The policy of halving the purchase tax for small-displacement vehicles is included in the plan and implemented for a long time;Expand the tax exemption scope and enrich the form of vehicle purchase tax;Preferential policy development should be more refined;Vehicle purchase tax preferential policy for regional differences.