A "green" vehicle tax system introduced by Japan's central government in fiscal 2001 will be extended for another two years under the tax system reform slated for fiscal 2004, according to an outline adopted on December 17, 2004. The vehicle tax for new models registered in fiscal 2004 and 2005 will be reduced by a certain amount depending on the vehicles' gas emissions and fuel consumption performance, for the fiscal year following the registration. In Japan, car owners must pay vehicle tax each year.

The tax rate will be reduced by about 50 percent for electric cars, natural gas cars, methanol cars, and cars rated as "new four-star" (see below) that have also achieved five percent or higher than certain fuel efficiency standards (see below). A 25-percent tax rate reduction will be given for "new four-star" vehicles that have also achieved fuel efficiency standards, and for "new three-star" vehicles that have also achieved at least five percent higher than fuel efficiency standards.

Vehicles eligible for green tax benefits are those certified by the low-emission vehicles authorization system under the 2005 exhaust emission regulations. Vehicles with exhaust emissions 75 percent or lower than the levels required by 2005 exhaust emission regulations will be rated as " new four-star," and 50 percent or lower as "new three-star." Stickers will be placed on these vehicles to indicate their emissions reduction levels by the number of stars.

The other standard to determine tax reductions (mentioned above) is based on fuel-efficiency (in kilometers per liter) that will be required in 2010 in Japan (for diesel cars the reference year is 2005) under the Law concerning the Rational Use of Energy.

Meanwhile, the government will continue to charge a tax of about 10 percent on diesel vehicles that have passed the 11-years mark from their initial registration, and 13 years for gasoline- and LPG-powered vehicles .



Posted: 2004/05/13 02:01:35 PM
Japanese version

TAG Energy , Government , System/Law , Transportation