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China to scrap highway tolls after levying fuel tax

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China's top economic planning body and finance ministry has jointly urged competent authorities to sort out the fees related to vehicles and transportation and to scrap the six categories of highway tolls and waterways maintenance and administration fees as of Jan. 1, said xinhuanet.com today.

The Chinese government will start its fuel tax and pricing reform on Jan. 1, 2009 by raising the consumption tax on retail gasoline and cutting the fuel prices. But it has also decided to abolish six categories of highway and waterway maintenance, transportation and administration fees to offset against the upcoming fuel tax, according to the National Development and Reform Commission (NDRC).

Before levying the fuel tax, the Chinese government has instead collected highway tolls, road maintenance fees, and highway transportation surcharges from auto users regardless of how much gasoline or diesel oil they use, but now has to reform these in response to strong public demands. The introduction of a fuel tax in China was first proposed in 1994 but has been delayed amid concerns that it would impose too great a burden on those who consumed more oil.

The highway tolls, maintenance and transportation fees, among others, have been considered great financial burdens by China's car owners and drivers. In October and November several Chinese cities saw strikes and protests by taxi drivers, mainly ignited by their prohibitive operational costs, including the high fuel price and numerous fees they have to pay for using the roads or highways.

In a statement it jointly issued on Friday with the Ministry of Finance, the NDRC urged road and transportation authorities nationwide to sort out all their levy items and scrap those listed in the six categories of highway and waterways fees. Starting Jan. 1, 2009, it will be against the rules to continue collecting the six kinds of fees when the fuel tax is to be levied.

By George Gao
The news is provided by Gasgoo.com

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