Those purchasing a new vehicle to replace an old car stand to save NT$30,000 (US$899) for one year should an amendment to the Commodity Tax Act (貨物稅條例) pass the legislature, a measure the government recently proposed to increase consumer spending.
The weekly Cabinet meeting yesterday approved the amendment, granting a reduction of NT$30,000 in commodity tax to car owners, against the backdrop of sluggish sales in the domestic car industry.
“Affected by the downturn in the economy, the car market has shrunk for three consecutive years,” Minister of Finance Lee Sush-der (李述德) told a press conference following the meeting.
Ministry of Transportation and Communications (MOTC) data show that the nation’s new car sales barely reached 13,000 units last month, the lowest level in 30 years.
The ministry expects the measure to boost annual car sales to 280,000 units, while the treasury will suffer a tax loss of NT$9 billion.
“Despite the potential tax loss, the measure will serve many other purposes that will have big impact on the economic development of the country,” Lee said.
It would encourage people to weed out old cars, thus reducing carbon dioxide emissions and saving energy, both problems caused by aging cars. It would also expand the domestic market, revive the auto industry and protect jobs, he said.
The current tax system places a 25 percent levy on cars under 2,000cc and 30 percent on vehicles with a bigger exhaust capacity.
It is up to car dealers to decide whether to translate the tax reform into lower vehicle prices.
The tax cut will not benefit first-time car buyers, but the measure will apply to new car buyers who own cars registered during the six months prior to the implementation of the measure.
Considering that most countries issue more than five denominations of banknotes, the central bank has decided to redesign all five denominations, the bank said as it prepares for the first major overhaul of the banknotes in more than 24 years. Central bank Governor Yang Chin-lung (楊金龍) is expected to report to the Legislative Yuan today on the bank’s operations and the redesign’s progress. The bank in a report sent to the legislature ahead of today’s meeting said it had commissioned a survey on the public’s preferences. Survey results showed that NT$100 and NT$1,000 banknotes are the most commonly used, while NT$200 and NT$2,000
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