The Shanghai municipal government has reduced the city’s vehicle and vessel tax standard to the lowest level of the statutory tax rate, which is expected to affect more than five million taxpayers and cut a total 500 million yuan in tax annually, The Paper reported.

The tax rate of vehicles used in production activities has dropped sharply, such as that of truckers and trailers which have dropped by 82%.

The current annual tax rate for trucks is between 16 to 120 yuan per ton based on the quality of the whole set. Shanghai will follow the lowest standard of 16 yuan per ton in its latest tax cut.

The new rules could be good for logistics companies, according to the report. For example, Air Liquide China, an industrial gas producer that manages more than 200 trailers and has paid 84,000 yuan in vehicle tax in 2018, is expecting to see a tax reduction of about 70,000 yuan.