Japan to mull tax cut on Auto Purchases
The ruling-party lawmaker said that Japan is more likely going to lower the auto-purchasing tax. On Thursday, the lawmaker said the auto-purchasing tax should be lowered in stages to slow down the impact on car sales. The Japanese car makers worried that auto sales will decrease because tax raises to 8% in next April. This will bring the bad impact of the whole economy.The first drastic overhaul related to auto-purchasing tax would be cutting in car tax. Even the government has already planned to cancel the car-purchasing tax by October 2015, the tax is scheduled to raise up 10%. JAMA is urging the government to lower the consumption tax by 3% to 5% of the purchase price until the 10% tax rate effects. The chairman of JAMA said “it will bring the negative impact to Japanese economy by increasing sales tax without reviewing car tax because it will lead a drop of car sales.” Further auto sale decreasing will be hard for car makers to justify use advanced technology and skills to keep the domestic productions. JAMA expects the sales will decrease 12% to 2.74 million cars this year after the government ended car purchasing incentive program last September. The association predicts that 8% consumption tax will decline the car sales by just leave at 5%. Moreover, it will cause 170,000 lost jobs.However, once the tax rate hits 10% ,the sales will drop by 930,000 cars and 270,000 job eliminations. Compare to other nations, auto tax is really high in Japan. Cutting auto tax still need to be discussed because it will affect the government revenue. Therefore, local government opposed to change the auto tax rate.