December 22, 2015

JAMA Comment on Japan’s Fiscal 2016 Tax Reform Plan
Fumihiko Ike, Chairman, Japan Automobile Manufacturers Association, Inc.

On December 16, Japan’s ruling coalition took the early decision to approve only a new, fuel efficiency-based tax scheme for motor vehicles to be levied from April 1, 2017.  JAMA finds it regrettable that this decision was taken before fully considering Japan’s extensive automobile tax structure, particularly in view of the consumption tax increase that is also scheduled to take effect in April 2017.  We recognize, however, that more motor vehicles will be eligible for exemption or a lower tax rate than are so now under Japan’s current acquisition tax incentive scheme for eco-friendly vehicles, and appreciate the fact that the new scheme therefore represents, in effect, a tax cap for vehicle owners.

Meanwhile, although no measures have been taken this year to lower the burden of the automobile tax on vehicle owners—an initiative which JAMA has long been calling for—we nevertheless welcome the intention to include in the fiscal 2016 tax system reform package the following specific reference to lowering the tax burden during vehicle ownership:  “Within the scope of fiscal 2017 tax system reform initiatives, […] comprehensive studies will be advanced with regard to the easing of the tax burden during automobile ownership, with measures devised accordingly.”

For its part, JAMA is and will be continuing its unflagging advocacy of a less complex and less onerous automobile tax structure.  We take this opportunity to lodge a strong request that, in line with the statement cited above, government action be taken to ensure the inclusion of specific provisions in next year’s tax reform initiatives to lower the tax burden, including the automobile tax burden, on vehicle owners in Japan.