The nation’s car industry leaders urged the government Monday to abolish automobile-related taxes to help ease the impact of the coming sales tax hike on vehicle sales.
At a joint press conference, the Japan Automobile Manufacturers Association and six other bodies called for eliminating the vehicle acquisition and weight taxes, as the government plans to draft tax reforms for fiscal 2013 in December.
The government is expected to raise the 5 percent consumption tax to 8 percent in fiscal 2014 and to 10 percent in fiscal 2015 as part of its fiscal rehabilitation efforts.
The move comes also as sales of new vehicles are dwindling following the termination in September of the government subsidy for the purchase of eco-friendly cars, while automakers face sluggish exports and sales amid the yen’s strength as well as strained economic ties between Japan and China over a territorial dispute.
“The burden (of auto taxes) on Japanese car users is extremely high,” said Akio Toyoda, chief of JAMA and the president of Toyota Motor Corp., expressing concerns that the planned tax hike would further increase the burden on consumers and hinder auto sales.
Toshiyuki Shiga, a vice chairman of the association and chief operating officer of Nissan Motor Co., also shared such concerns, urging the government and the Bank of Japan to take “every possible means” to cope with the yen’s rise.
According to JAMA, there are currently nine kinds of taxes imposed on vehicles totaling over ¥7 trillion a year. The government held off a decision on the abolition of the auto acquisition and weight taxes when legislation for tax reform was enacted in August.
Honda Motor Co. on Monday revised downward its earnings forecast for fiscal 2012 to March, citing slowing sales in China following a recent wave of anti-Japan protests in the country.
Honda now expects to post a group net profit of ¥375 billion, down 20.2 percent from an earlier forecast ¥470 billion. The automaker cut its forecast for a group operating profit by 16.1 percent to ¥520 billion, on sales of ¥9.8 trillion, down 4.9 percent.
Honda lowered its sales target in China for the January-December period from the earlier-set 750,000 units to 620,000 units, amid strained economic ties between Japan and China.
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