The Cabinet approved a set of tax reform plans Friday for the next fiscal year, including a reduction in levies on car ownership, as well as the introduction of an environment tax to fight global warming.
The Noda administration is aiming to have the Diet pass the related bills before the fiscal year ends March 31.
To support the auto industry, suffering through sluggish exports due in part to the appreciation of the yen, the government will try to stimulate consumer demand by cutting the automobile weight tax.
It wants to extend by three years the tax break for purchasing environmentally friendly autos. It expires this spring.
The environment tax, to help cut industrial carbon emissions, would come in the form of an increase in the levy on the purchases of fossil fuels like crude oil and liquefied natural gas. The government aims to phase in the new burdens from October.