BEIJING — China will halve the purchase tax for eligible passenger vehicles and ease restrictions to spur auto sales and underpin consumption, authorities said.

The country will slash the purchase tax by half for passenger cars under 300,000 yuan (about $45,040) with engine displacements within 2 liters purchased between June 1 and Dec 31 this year, said a notice jointly released by the Ministry of Finance and the State Tax Administration on May 31.

The move is in line with a State Council circular regarding a package of detailed policy measures to stabilize the economy. It called for efforts, including the tax cut, to shore up consumption, especially purchases of big-ticket items.

Noting that bolstering auto sales is of great significance toward consumption recovery and the auto industry, Vice-Minister of Commerce Sheng Qiuping said the country will further promote new energy vehicles, especially in rural areas.

The circular also urged localities with car purchase restrictions to raise the cap on number plates and ease requirements on eligible buyers.

Metropolises like Shanghai and Shenzhen have increased their rations of registration plates. Provincial-level regions like Jilin and Chongqing introduced measures including subsidizing new car purchases and facilitating entry to urban areas for pick-up trucks, said Sheng.

Sheng believes that with the implementation of recent and upcoming policies, car sales will soon warm up to underpin economic recovery.

China's auto sales account for around 10 percent of retail sales as a whole.