The government plans to raise the tax on owning minicars with engine displacement of up to 600cc from ¥7,200 a year now to over ¥10,000, sources said Thursday.
The government is studying two options: raising the municipally levied tax to ¥10,800 or to ¥14,400, the sources said.
The minicar ownership tax is set below ¥29,500 for compact cars up to 1,000cc.
The tax increase is expected to attract criticism from the minicar industry and minicar owners. The step is intended to make up for an expected decline of about ¥200 billion in municipal tax revenue following the planned abolition of a car acquisition tax, also a municipal tax applied to car transactions worth more than ¥500,000, in October 2015.
An increase to ¥10,800 in the minicar ownership tax would raise the overall annual revenue for municipalities by ¥79.5 billion; and an increase to ¥14,400 by ¥159 billion, the sources said.
The government plans to include the tax hike in a fiscal 2014 tax reform package to be compiled in mid-December.
Foreign brands surge
Overseas carmakers led by Volkswagen AG delivered more vehicles in Japan in the first 11 months of this year than in all of 2012, expanding their record share of the world’s third-biggest auto market, the Japan Automobile Importers Association said Thursday.
Registrations of imported cars from foreign brands rose 16.3 percent from a year earlier to 246,915 vehicles in the January-November period, it said. That expanded their market share to a record high 9.3 percent, JAIA said.
Foreign makers are boosting deliveries on Toyota Motor Corp.’s home turf this year, while Japanese carmakers’ domestic sales have declined. VW’s refreshed Golf hatchback won this year’s Car of the Year award in Japan, the first imported model to receive the accolade in its 34-year history.