Hiroshi Okuda, new chairman of the Japan Automobile Manufacturers Association, is determined to push the government into rectifying the vehicle tax system and reducing the burden on car owners.
“The present auto-related tax system is too complicated and the tax burdens on car owners are too heavy,” he said in an interview with a group of reporters.
Okuda, who is also chairman of Toyota Motor Corp., took over JAMA’s top post last month.
Currently, car owners are subjected to nine kinds of tax, including the consumption tax paid at the time of purchase, national and local ownership taxes, and fuel tax. Part of the tax revenues is used for road maintenance and construction.
According to JAMA estimates, the tax burden on car owners in Japan would top 9 trillion yen in fiscal 2000, a level higher than those in other industrialized countries, including Germany, Britain, France and the United States.
“The auto industry and car users question whether the revenues coming from automobile taxes are used efficiently,” Okuda said. “We need a tax system that will be more beneficial to car users.”
Okuda also said the association will scrutinize the preferential tax treatment now enjoyed by minicar owners. Vehicles with engine displacements of 660cc or less face an ownership tax of only 7,200 yen per year, compared with the 29,500 yen or more charged to owners of larger cars.
“Personally, I wonder if minicar users need to receive such better treatment,” he said.
But given the delicate nature of the issue, Okuda conceded that “we have to discuss it carefully” because it may affect minicar sales.
In the meantime, he wants the government to introduce positive incentives to promote environmentally friendly cars rather than disincentives for gas guzzlers.
He also voiced concern over recent moves in Europe to increase the burden of environmental preservation that automakers are obliged to bear.
On May 24, the European Union Council and Parliament approved a proposal to make either automakers or the public sector cover the cost of recycling used vehicles, lifting the burden from car owners.
In Japan, about 80 percent of used vehicles are recycled at the owners’ cost. The amount required to recycle illegally abandoned cars, however, is borne by the local governments that collect them and by the auto industry.
“If the (European) rule imposes too much of a burden on Japanese carmakers that manufacture and sell cars in Europe, we will discuss the issue with the EU council,” Okuda said.
Asked about the outlook for overall sales for the current business year through next March, Okuda said the association-set target volume of 6.07 million units for cars, trucks and buses can be achieved as long as the domestic economy does not further deteriorate.
He also remains confident about long-term prospects.
“The Japanese car market may have been saturated,” he said. “But when roads and parking spaces in big cities like Tokyo and Osaka are rearranged so that cars can run smoothly, the demand for cars will increase.”