Japan auto industry bodies calls for abolition of auto tax

Chiefs of Japan's auto industry bodies on Monday urged the government to abolish automobile-related taxes to help ease the impact of planned sales tax increases on auto sales.

At a joint press conference, the Japan Automobile Manufacturers Association and six other bodies called for eliminating the vehicle acquisition and weight taxes as the government plans to draft tax reforms for fiscal 2013 in December.

The government is expected to raise the consumption tax rate from the current 5 percent to 8 percent in fiscal 2014 and to 10 percent in fiscal 2015 as part of its fiscal rehabilitation efforts.

The move comes also as sales of new vehicles are dwindling following the termination in September of the government subsidy for the purchase of eco-friendly cars, while automakers faces sluggish exports and sales amid the yen's strength as well as strained economic ties between Japan and China over a territorial dispute.

"The burden (of auto taxes) on Japanese car users is extremely high," said Akio Toyoda, chief of JAMA and the president of Toyota Motor Corp., expressing concerns that the planned tax hike would further increase the burden on consumers and hinder auto sales.

Toshiyuki Shiga, a vice chairman of the association and chief operating officer of Nissan Motor Co., also shared such concerns, urging the government and the Bank of Japan to take "every possible means" to cope with the yen's rise.

According to JAMA, there are currently nine kinds of taxes imposed on vehicles totaling around 8 trillion yen a year. The government held off a decision on the abolition of the auto acquisition and weight taxes when legislation for tax reform was enacted in August.

(c) 2012 Kyodo News International, Inc.

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