The Japanese automakers are not happy at all with the government’s recent proposal to replace the current levies with a new one.
Japan’s ruling Liberal Democratic Party proposed last month a new car tax to replace the auto acquisition levy from April 2017, which will further increase the sales tax. The Japan Automobile Manufacturers Association have strongly supported the dropping of such duty, as they claim that the overcharging is not helping at all the automotive industry in the country, as well as the economy, since the buyers already pay a national sale tax when purchasing a vehicle. Automakers warned the government that a further toll will have a negative impact on domestic production and will definitely not encourage an increase of the auto market. “We can’t take it anymore,” Fumihiko Ike, chairman of the association, recently stated at a briefing in Tokyo. “Taxes are too high and if this continues, it will be hard for the auto industry to play a leading role in Japan’s economy.”
The automakers claims are justified, especially if the falling trend of the younger buyers in Japan is to be considered. The number of driver-license holders under the age of 40 dropped 46 percent during the last 13 years. Also, in a comparison with the US levies, the Japanese car owner has to pay taxes almost five times higher, according to association estimates. The new government’s plan includes four grades of tax rates from zero to 3 percent for regular vehicles and will be based on fuel efficiency. Under the current system, consumers pay both the national sales tax and a vehicle acquisition tax when buying a car. Japan’s sales tax is set to rise to 10 percent in April 2017, from 8 percent.