The government will consider a tax increase for less fuel-efficient and other nonenvironmetally friendly vehicles, a senior Finance Ministry official indicated Thursday.
"The basic idea is that taxes should be raised on vehicles that are considered worse for the environment," Senior Vice Finance Minister Naoki Minezaki told a press conference.
The government introduced tax breaks earlier this year for vehicles that meet government-set fuel efficiency and gas emission standards. The Democratic Party of Japan, which won power in the general election in late August, has pledged to eliminate provisional portions of vehicle-related taxes, including the weight tax.
Minezaki hinted the DPJ government may adapt the tax system, depending on environmetally friendly performances of vehicles, while eliminating the provisional tax portions.
But the idea is expected to come under fire from the automobile industry.
At the press conference, Minezaki also endorsed Deputy Prime Minister Naoto Kan's proposal for regular meetings between the government and the Bank of Japan.
"The BOJ has the great challenge of finding ways to combat the deflationary price trend anticipated by the central bank in its semiannual economic outlook" released last week, he said.