SHANGHAI - CHINA is raising its sales tax on big cars to as high as 40 percent, and drastically cutting taxes on small cars, in its latest attempt to combat emissions that contribute to heavy blankets of smog over most of its cities.

The tax on passenger vehicles with engines bigger than 4 liters will be doubled to 40 per cent from 20 per cent, effective September 1, the Finance Ministry said on Wednesday in a statement on its Web site.

Those buying vehicles with engines sized from 2 litres up to 4 litres will have to pay a 25 per cent tax, up from the current 15 per cent, it said.

'Autos are the giants of energy consumption and pollution emissions and this is a major part of the effort to conserve resources and reduce emissions,' the ministry said.

The sales tax for cars with engines at or smaller than 1 liter would drop to 1 per cent from the current 3 per cent, the Finance Ministry said.

China appears to have made little headway in its struggle to reduce auto emissions, seen most prominently in the effort to keep smoggy Beijing's skies clear during the Olympic games.

Many of its cities routinely are cloaked in a toxic gray haze that has grown worse as the numbers of vehicles on the roads has risen precipitously in recent years.

At the same time, authorities are seeking ways to reduce fuel consumption amid major shortages, especially of diesel. -- AP