January 24, 2013

JAMA and JADA Comment on the Government's Fiscal 2013 Comprehensive Reform of the Tax System

Akio Toyoda, Chairman, Japan Automobile Manufacturers Association
Masahiro Morikawa, Chairman, Japan Automobile Dealers Association

Our industry has, over many years, regularly requested the Japanese government to abolish the automobile acquisition tax and the automobile tonnage tax.  It has continued until now to do so, not only in the interest of vehicle users, but also to help avert any adverse impact on the Japanese economy and employment that might accompany a scheduled increase in the national consumption tax, and to secure greater fairness in Japan’s tax system.

In the ruling parties’ official joint decision today on tax system revisions for fiscal 2013, reduction of Japan’s heavy tax burden on vehicle users was endorsed in the agreement to mandate, in the government’s annual Comprehensive Reform of the Tax System initiative, that the abolition of the automobile acquisition tax coincide with the consumption tax rate hike (to 10%) provisionally scheduled for October 2015. 

We wish, on this occasion, to express our gratitude for the efforts of all those involved in this welcome decision and for their understanding of our perspective in this regard.  The automobile industry intends to do everything within its capability to contribute to Japan’s economic recovery.

That said, the postponement of the elimination of the automobile tonnage tax is regrettable.  We believe this postponement should be of the shortest possible duration, and therefore take this opportunity to call upon the government to ensure that more extensive reform of Japan’s auto-related tax regime is provided for in its Comprehensive Reform of the Tax System initiative for fiscal 2014.

Note: Japan’s fiscal year begins on April 1 and ends on March 31 of the following year.