In a bid to enhance tax equity, China is set to revise its preferential policies regarding vehicle and vessel tax for certain automobiles, effective from January 1, 2027. On July 3, an announcement was jointly issued by the Ministry of Finance, the State Taxation Administration, and the Ministry of Industry and Information Technology. This announcement elucidated the discontinuation of the policy that halved the vehicle and vessel tax for fuel-efficient vehicles. Additionally, it clarified the cancellation of the preferential treatment that exempted pure electric commercial vehicles, plug-in (including extended-range) hybrid vehicles, and fuel cell commercial vehicles from this tax. This adjustment implies that, commencing in 2027, the aforementioned vehicle types will be mandated to pay vehicle and vessel tax in compliance with regulations. Nevertheless, pure electric passenger vehicles and fuel cell passenger vehicles, which do not have any engine displacement, remain outside the purview of the vehicle and vessel tax. Consequently, they are not impacted by this policy modification and will continue to be exempt from paying the vehicle and vessel tax^[1][2][3][4]^.