Japan extends tax breaks for low-polluting vehicles

Japan is extending tax breaks for low-polluting vehicles by another three years to help support the country’s automotive industry. The tax breaks, initially set to end in April, will continue until April 2015, according to a plan approved by the Cabinet. Japan’s automobile market has been stagnant for years, but demand for hybrids and other “green” cars, prompted by tax breaks and interest in fuel efficiency, has been the solitary bright spot. Under the government program, hybrids and electric vehicles are tax-free, delivering savings of about ¥150,000 (US$1,500) for buyers of the Toyota Prius or the Nissan Leaf. Other fuel-efficient models qualify for lower savings. In addition to the tax breaks, “green” cars have also received government subsidies to encourage sales, but whether those will be extended is still undecided. (December 10, 2011)