Japan to Continue Tax Breaks for Eco-Friendly Vehicles

Tokyo, Dec. 20 (Jiji Press)--The Japanese ruling coalition's tax panel is considering extending tax breaks for eco-friendly vehicles beyond fiscal 2015 under stricter fuel economy standards, informed sources said Saturday. The ruling camp led by the Liberal Democratic Party intends to include the plan in their tax system reform proposals for fiscal 2015 that will be compiled on Dec. 30, the sources said. But it remains to be seen whether the standards will be tightened as planned because the auto industry is opposing the move. The standard-tightening will result in an increase of more than 100 billion in tax burdens on vehicle purchasers and existing owners, the Japan Automobile Manufacturers Association said. At present, reduced automobile acquisition tax and vehicle weight tax rates are applied to nearly 90 pct of models available in the market, though the government initially envisaged that the tax breaks, introduced in fiscal 2009, would cover some 50 pct of newly sold vehicles. Given the sharp increase in eco-friendly models subject to the special tax cuts, some ruling party members and government officials have said the fuel economy standards should be tightened if the preferential tax measures are extended. END