We should know a tax law is just an unrealistic dream if it only considers theoretical fairness and justice but never considers feasibility and operating. For vehicle tax, Japan, South Korea and China's Taiwan use engine capacity as a standard for levying annual vehicle tax. Therefore, at present, it's scientific and reasonable to use engine capacity as a standard for the tax. It not only reveals the value of vehicles to a certain extent since engine capacity has positive correlation with cost, but also shows a policy orientation of encouraging vehicles with smaller energy consumption and fewer emissions in accordance with the international practice.

Adding to the tax burden

Dong Yang (www.ifeng.com): Vehicle tax belongs to property tax, which should be collected on the basis of value. It's neither scientific nor in accordance with the original intention of the tax to levy it on the basis of engine capacity. Also, it's not good for the development of China's own brands. For instance, vehicles with an engine capacity of 2.0 liters may sell more than 500,000 yuan ($74,626) if they are foreign brands but only a little bit more than 100,000 yuan ($14,925) if they are Chinese brands. But for both, vehicle tax is the same. It's not fair for China to levy a tax on the basis of engine size.

Reform of taxation should be subject to the principle of neutrality, which means keeping the total amount unchanged and adjusting the structure, rather than enhancing the standard of taxation without adjusting the taxation system of the auto industry.

Xiong Chunlin (Dongfang Daily): Levying a tax on the basis of engine capacity does not show the nature of property tax. The basis of property tax should be value of property. Therefore, it's irrational to levy it on the basis of engine capacity. It won't help save energy and reduce emissions either, since consumers who purchase luxury cars with large engine capacities are not sensitive to the amount of tax, which makes it useless for curbing pollution.

The draft law should pay more attention to differentiation of taxation collection by offering rebates to rural areas to stimulate consumption in those areas. Along with the process of autos increasingly being sold in the countryside, increasing the tax will additionally encumber farmers who purchase cars.

Zhou Zixun (The Beijing News): The new tax policy is another measure for energy saving and emissions reduction taken by the Central Government. But whether this move is effective remains to be seen. The Central Government should transform the tax into a fuel tax rather than adding burdens on to auto consumers.

China's total vehicle sales surged to 16.4 million by November 2010, according to the China Automobile Industry Association. Whole-year sales in 2010 were expected to hit 18 million units, making the nation the world's largest auto market for a second year.

Along with these remarkable results, we also have very a severe situation in terms of transportation and the environment. How to balance auto consumption and environment and transportation is an urgent problem facing us.

On the surface, levying a vehicle tax can have a positive significance in reducing emissions. But the reality is, for vehicles with small engine capacity, due tax will be reduced, which will stimulate sales of vehicles of small engine capacity. The soaring sales will inevitably add to the traffic burden. So, it's not helpful for energy saving and emissions reduction.

In a culture of automobile consumption, each division of the market has its own characteristics. For consumers of vehicles with large engines, extra tax will only entail extra input for their lifestyle, which will hardly change their choice.

From the experiences of developed countries, vehicle tax should be transformed into fuel tax. For instance, developed countries, such as the United States and Britain, emphasize taxation during the process of using automobiles as well. But they use fuel tax to show the principle of greater tax if you drive more, rather than setting fixed taxation. It can connect people's money with an energy-saving concept for vehicles, using frequency of use and mileage. It's more efficient than a vehicle tax.

We should notice that environment departments can do little in this aspect. Also, different departments have different standards for defining environment-friendly vehicles. As well, the taxation management system is not standardized. A fuel tax can make the policy more efficient as an incentive.

Zhu Zhigang (Economic Observer): Collecting vehicle tax mainly has three purposes: first, increasing financial revenue for local governments to enhance their ability to improve transportation; second, improving wealth distribution by collecting more from people with higher incomes; and third, promoting reasonable use of vehicles and reducing resource waste.

We shouldn't expect too much from the tax. Its main functions should be readjusting income distribution, promoting use of property and advocating energy saving and emissions reduction. But we should also know the most important function should be readjusting income distribution. Other functions are incidental.

Now, the period for public opinion input has ended. During the month, nearly 100,000 opinions were collected, of which 54.62 percent demanded revision and lower taxation.

As a regular tax, the vehicle and vessel tax belongs to property tax. As long as it is property tax, it should be levied on the basis of value.

For instance, an Audi and an Alto with the same engine capacity have a huge difference in terms of value, but should pay the same amount of tax. This is apparently unfair and not in accordance with the nature of property tax. It doesn't reflect property and ability to pay of those taxed.

The tax should be collected on the basis of value, and take depreciation into consideration, which means the amount would reduce year on year.

After defining the tax as property tax and collecting it on the basis of value, the Central Government should redesign its structure to enable most people to pay less for it and increase the amount on high-end vehicles. The government should also offer tax rebates for vehicles using clean energy, such as electric vehicles.