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September 17, 2009

JAPAN: Keep tax breaks says JAMA

The chairman of Japan's key automaker group on Thursday current tax breaks for fuel-efficient cars have been effective in boosting sales and urged the new government to maintain them until March 2012 as planned.

The chairman of Japan’s key automaker group on Thursday current tax breaks for fuel-efficient cars have been effective in boosting sales and urged the new government to maintain them until March 2012 as planned.

”The eco-car tax breaks have undoubtedly pushed up the share of environmentally-friendly cars in Japan’s auto sales, so this is a policy that has contributed to the environment,” Japan Automobile Manufacturers Association (JAMA ) head Satoshi Aoki said in Tokyo.

”It has also contributed strongly as an economic measure, so I hope it will continue for three years as initially planned,” Aoki, who also heads Honda Motor , said.

The previous day’s launch of the new cabinet headed by Democratic Party of Japan leader Yukio Hatoyama had raised concerns that current tax breaks on fuel-efficient cars would be scrapped before the March 2012 deadline in place of the promised removal of petrol and other provisional taxes.

The former Liberal Democratic Party-led coalition government introduced the tax breaks earlier this year, as well as some subsidies to help boost car sales in Japan, which were severely battered by the global economic downturn.

On subsidies for energy-saving cars which expire at the end of next March, Aoki said the industry body will examine what kind of impact the termination will have on car demand.

Aoki said the removal of the other taxes will represent the ”first step” towards realising the auto industry’s demand to reduce or eliminate a total of nine auto-related taxes, but added he does not see the measure as being linked to scrapping the eco-car tax breaks.

According to Kyodo News , Aoki also said the new government’s pledge to ban the dispatch of temporary workers to manufacturing companies may have a ”significant impact” on small- and medium-sized auto parts makers.

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