The application of the temporary tax rates for automobile related taxes (acquisition tax, automobile tax, tonnage tax
and fuel tax) due to expire at the end of FY 2002 was extended for five more years.
The greening of the automobile tax system is a special measure that allows reduction of the tax rates for environmentally-friendly low emission and fuel-efficient vehicles newly registered according to their emission performance and fuel performance while imposing heavier taxes on old vehicles that have been used for a given period of time since registration which are environmentally unfriendly (diesel-powered vehicles: 11 years or longer, gasoline-powered vehicles: 13 years or longer).
The effective period of automobile tax incentives for low emission vehicles due to expire at the end of FY 2006 has been extended (i) for two years for electric vehicles (including fuel cell powered vehicles), CNG-powered (compressed natural gas) vehicles and hybrid vehicles (trucks and buses) targeted based on emission performance, and, (ii) for two years for hybrid passenger vehicles targeted based on emission performance for lower incentive percentages.