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Japan eyes tax breaks for driver-assist cars

Tokyo

THE government is considering the introduction of tax breaks for cars with driver-assistance systems, as a special measure to promote cars with enhanced safety and reduce the number of accidents caused by elderly drivers, The Yomiuri Shimbun has learned.

The government will start formulating details for the tax incentives soon, aiming to introduce them in fiscal 2021.

Owners of passenger cars and mini passenger cars are subject to automobile taxes and automobile weight taxes. The government's scheme would reduce these taxes for cars that meet certain requirements in terms of safety performance.

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When developing a plan for the tax reductions, the government will use as a reference the eco-car tax breaks currently applied to cars with high efficiency in fuel consumption and other environmentally friendly features. The three ministries of transport, economy and finance will consider further details, such as the scale of the tax reductions and which cars are eligible.

The government intends to make this special measure a main pillar of promoting cars with driver-assistance systems.

Since 2017, the government has been promoting "safety support cars" - automobiles equipped with features like automatic braking, lane departure prevention and collision avoidance.

Automatic braking is the leading feature among these safety systems, and the government is aiming for more than 90 per cent of new automobiles to be equipped with it by 2020.

The National Police Agency is also considering issuing a new form of driver's licence, which will be usable only for cars with driver-assistance systems.

The new special tax breaks are meant to prompt consumers to purchase cars with safety functions and encourage elderly drivers to switch to those cars. They will also encourage automobile manufacturers to develop such enhanced-safety cars.

Regarding the scale of the envisioned tax breaks, a plan has been on the table to review the eco-car tax breaks to generate fiscal resources for the new reductions.

The idea is supported by some in the government and the ruling coalition, with a senior member of the Liberal Democratic Party's Research Commission on the Tax System saying that "the policy effect of the eco-car tax breaks is weakening, as many more cars have become eligible."

Requirements for receiving the envisioned tax reduction will be considered with reference to the performance assessment of automatic braking systems that the transport ministry established in April 2018.

Conditions established under that system include the provision that the automatic braking system should "prevent a car running at 50 kph from colliding into another car that has stopped on the road ahead, or reduce the car's speed to 20 kph or slower in case of collision".

The envisioned tax breaks are expected to apply mainly to automobiles that pass the performance assessment. WP