AUTONEWS

Japan wants to raise taxes on electric vehicles

In Japan, internal combustion vehicles are taxed at up to ¥110,000 (€758) per year, depending on engine size. However, local authorities tax electric and fuel cell-powered vehicles up to 25,000 yen (€173) per year, regardless of their specification. Now that can change.

Lawmakers in Japan may change local taxes on electric vehicles as their number on local roads increases. Nikkei Asia reports that one change being considered is to tax electric vehicles based on their wattage. This is the approach taken in some European countries, and the Ministry of Internal Affairs and Communications believes that this may be the right time for such changes.

Electric vehicles account for between 1% and 2% of new car sales in Japan, and the ministry will ask policymakers to consider proposals to be included in the government's fiscal 2023 fiscal plans. raises 1.5 trillion yen in fiscal year 2022 because of its car taxes. That money is important for road maintenance, but it has dropped 14% since its peak in fiscal 2002.

The ministry is understood to be concerned that the switch to electric vehicles will further reduce this source of income, noting that electric vehicles are heavier than internal combustion vehicles and put more pressure on local roads.

The Ministry of Economy, Trade and Industry has opposed tax increases that could slow demand for electric vehicles in Japan. Japan's Ministry of Finance is also looking at ways to stem an expected drop in gasoline tax revenue and may introduce a tax based on distance travelled.

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