THE MOTOR INDUSTRY OF JAPAN 2019

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Automobile-Related Taxes Are OnerousConsider the case of a passenger car costing 2.40 million yen when purchased new and providing 13 years of service to the original owner for private use. During that period, six different categories of taxes (including consumption tax at the time of vehicle purchase and on fuel) will be assessed on the owner/user, amounting to a grand total of roughly 1.8 million yen. In addition to these various taxes, the user will also be required to pay onerous expressway tolls, automobile insurance premiums (mandatory and optional), a recycling fee, periodic inspection fees, and maintenance costs. ● INTERNATIONAL COMPARISON OF TAXES ASSESSED 　 ON AUTOMOBILE OWNERSHIPx 10,000 yen (Vehicle service life: 13 years)80706050403020100● TAXES ASSESSED ON PASSENGER CAR OWNERSHIP AND USE (PRIVATE) IN JAPAN　 (assuming a 13-year service life)Yen1,400,0001,200,0001,000,000800,000600,000400,000200,0000Tonnage tax16.0Total during ownership62.8Total during ownership28.7Total during ownership12.8Total duringownership2.2Total during ownership18.3Automobile (engine capacity-based) tax46.8Japan (Minicar)U.S.A.FranceGermanyUKJapan(During ownership)(Onacquisition)(During ownership)(Onacquisition)(During ownership)(Onacquisition)(During ownership)(Onacquisition)(During ownership)(Onacquisition)(During ownership)(Onacquisition)x 2.2x 4.9Automobile tax12.8x 29Retail tax21.3Environmental performance-based tax1.1Environmental performance-based tax2.2Registration tax4.8Minicartax14.0Consumption tax12.7Assumptions: 1) Engine capacity: 2000cc. 2) GVW≤1.5t. 3) Purchase price: ¥2.40 million (¥1.27 million for a minicar). 4) Fuel consumption (JC08 test cycle-based): 20.5km/L (CO2 emissions: 113g/km). 5) France = Paris; U.S.A. = New York City. 6) France: Vehicle in no. 8 horsepower “class.” 7) Service life: 13 years. 8) Currency exchange rates: EUR 1 = JPY 130, GBP 1 = JPY 150, USD 1 = JPY 112 (averaged April 2018-March 2019).Notes: 1. Figures here are based on tax rates in effect from October 2019. 2. Figures here do not take into account applicable incentives/surcharges, such as tax incentives for eco-friendly vehicles in Japan, if any.Source: Japan Automobile Manufacturers AssociationAssumptions: 1) A passenger car with 2000cc engine capacity and purchase price of ¥2.40 million (retail price, excluding consumption tax). 2) GVW≤1.5t. 3) Annual fuel consumption: 1,000 liters. 4) Tonnage tax imposed yearly, but collected only at time of mandatory vehicle inspection. 5) Tax amounts reflect rates in effect from October 1, 2019. 6) Consumption tax = 10% of retail price. 7) The recycling fee indicated is the average rate for a 2000cc passenger car.Notes: 1. Estimated expressway tolls, mandatory insurance premium payments and recycling fee are included here because they can be considered similar to taxes. (Mandatory insurance premium values indicated in effect at October 1, 2019.) 2. Value of expressway tolls was estimated by JAMA based on expressway toll revenue in 2017.Source: Japan Automobile Manufacturers Association Consumption tax (on automobile)Environmental performance-based taxAutomobile (engine capacity-based) taxTonnage taxGasoline taxRegionalgasoline excise taxConsumption tax(on fuel) Expressway tollsMandatoryinsurance Recycling fee TotalBaseline = New vehiclepurchase price240,000(240,000)21,600(21,600)159,900(36,900)468,000(36,000)631,800(48,600)67,600(5,200)174,200(13,400)470,600(36,200)2,409,800 (484,850)2,400,000165,100(35,950)11,000(11,000)2nd to 13th year1st year (on acquisition)Consumption tax24.0Value added tax48.0Value added tax45.6Value added tax48.0Tonnage tax4.3Automobile tax2.2Automobile tax28.7TaxesThe Burden on Motor Vehicle Users44