Legislators yesterday gave preliminary approval to a draft bill that offers commodity tax cuts for liquefied petroleum gas (LPG)-powered hybrid cars to help the country reduce greenhouse gas emissions.
The bill proposed lowering the commodity tax on LPG hybrid vehicles by NT$25,000 (US$861.8) for a five-year period. However, to encourage more people to buy the hybrids, some lawmakers suggested increasing tax cuts.
Automobile companies pay a commodity tax rate of between 25 percent and 30 percent of the factory value of a car, which they then pass on to buyers, Ministry of Finance data showed.
“The bill, if passed, may push local automobile firms to develop or to import more environment-friendly models, while encouraging consumers to buy less polluting vehicles,” Minister of Finance Lee Sush-der (李述德) said during a question-and-answer session at the legislature.
Passage of the bill would help the nation reduce energy consumption and cut greenhouse gas emissions, and follows the Cabinet’s strategy of encouraging energy-saving electric vehicles, Lee said.
The tax breaks for LPG hybrid car distributors may create a demand for 5,200 LPG hybrid cars in total in the next five years, which would reduce tax income by an estimated NT$136.5 million, the ministry said.
The ministry expects the legislative second and third readings of the bill to go smoothly.