Japan extends tax incentives and reinstates scrappage subsidies

The Japanese government recently approved an extension of tax incentives and reinstated subsidies for car buyers who scrap their old cars for new, more fuel-efficient vehicles, measures that will give automakers badly needed support as the yen continues to grow stronger. Tax incentives that will expire by the end of this fiscal year on March 2012 were extended for three years under strict fuel efficiency requirements. Scrappage subsidies expired in September, but the 300 billion yen (US$3.9 billion) subsidy program was reinstated. Chairman of the Japan Automobile Manufacturers Association (JAMA), Toshiyuki Shiga, said that the tax incentives and scrappage subsidies had previously boosted domestic sales by 900,000 over one year. “We are hoping for a similar boost when both the incentives and subsidies are available in the 2012 fiscal year,” he said. (December 22, 2011)