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Relevant central government department said it had no plans to slash a tax on vehicle purchases this year, official media reported Monday.

Earlier media reports had said that China may reduce the tax on purchasing cars with engine capacities between 1.8 liters to 2 liters.

In January, China halved the purchase tax on cars with engine capacities below 1.6 liters to 5 percent till the end of this year.

From January to May, sales of domestic passenger cars with engine capacities below 1.6 liters accounted for nearly 70 percent of the total sales, believed to be the result of the preferential policy.

China will continue its tax reduction policies for such cars in the next two years, the report said.

According to the automobile industry development plan issued by central government this March, China aims to increase both production and sales of cars by 10 percent each year from 2009 to 2011.