The government and the ruling parties plan to introduce a tax cut for eco-friendly minivehicles in the fiscal year beginning next April 1.
The tax cut is for "kei" class minivehicles, which have an engine displacement of 660 cc or less and a maximum passenger capacity of three. It also includes motorcycles with displacements of between 125 cc and 250 cc, political sources said on Sunday.
The program is aimed at cutting the light motor vehicle tax, which is applied specifically to that class of vehicles, and not to used and two-wheel minivehicles. It will form part of the tax reform policies for fiscal 2015 to be put together soon by the Liberal Democratic Party and Komeito, the sources said.
The government and the ruling parties decided to extend the deadline for an exemption or reduction in automobile weight and acquisition taxes for fuel-efficient cars beyond next spring after narrowing down the vehicles covered.