Japan Panel Eyes Vehicle Weight for Auto Tax Size

Tokyo, Oct. 7 (Jiji Press)–A Japanese government panel has broadly agreed to introduce vehicle weight as a factor to determine the size of automobile tax levied on owners. Currently, the automobile tax rate is set in accordance with the size of engine displacement. To electric and fuel cell vehicles with no engine, the minimum rate is applied. At a meeting Monday, the Local Public Finance Council, under the internal affairs ministry, reached the broad conclusion that more levies should be imposed on such vehicles following an increase in heavy luxury EV models that accelerate road deterioration. The government and the ruling camp will review auto-related taxes in their annual discussions on fiscal 2026 tax system reforms later this year. Owners of EVs, whose average prices reach 7 million yen or more, enjoy about an annual 10,000-yen tax discount compared with those of gasoline vehicles, sold at 3 million yen or more on average. With the automobile tax designed to impose bigger levies on vehicles that damage roads more, the panel aims to adopt vehicle weight as a factor to determine the size of tax for EVs and fuel cell vehicles. The council is also seeking to decrease tax burdens at the time of purchase of EVs, based on how environmentally friendly they are, while increasing those on gas-powered vehicles. END [Copyright The Jiji Press, Ltd.]