Using DID Model to Analyse the Impact of Vehicle Purchase Tax on the Sales of Alternative Fuel Vehicle

Abstract At present, countries in the world are paying more and more attention to the importance of green development and sustainable growth, and taxation plays a very good role in regulating it. In China, the role of taxation policy as a means of stimulating green consumption is becoming more and more significant. This paper starts with the vehicle purchase tax and uses the Difference in differences (DID) model to study its impact on the alternative fuel vehicle industry. The purpose of the research is to use the method of empirical research to test the impact of preferential vehicle purchase tax policies on the sales of alternative fuel vehicles using automobile production and sales data as samples. This research is helpful to enrich the research on preferential policies of vehicle purchase tax, and provides a good reference for empirical research on the impact of vehicle purchase tax on the sales of the automobile industry. Researched the impact of tax incentives for automobile purchase tax, and proposes constructive guidance with China’s specific situation. It has an important impact on promoting China’s further improvement of the tax system reform and the development of the alternative fuel vehicle industry, and also plays an active role in supporting macroeconomic transformation and development.