Taiwan Agrees Tax Reductions For Dual-Fuel Vehicles

by Mary Swire, Tax-News.com, Hong Kong

03 February 2010

In a move aimed at encouraging the reduction of air pollution and CO2 emissions, Taiwan’s government has proposed a reduction in commodity tax for dual-fuel vehicles purchased in the country.

A draft revision to the Commodity Tax Act would cut the tax by TWD25,000 (USD780) for each newly-purchased and registered liquefied petroleum gas (LPG)/gasoline dual-fuel vehicle for five years, effective from the date of the revised law’s approval and implementation. Together with the TWD25,000 refuelling vouchers that are already provided for the new purchase or re-fitting of dual-fuel vehicles, this would add up to a total saving of TWD50,000 per vehicle.

Taiwan’s Ministry of Finance explained that government policy calls for the development of high-energy-efficiency and low-pollution vehicles. Since the vehicles used in Taiwan primarily use gasoline or diesel fuel, which cause relatively high emissions of carbon dioxide, the government hopes that the proposed tax cut will boost the incentive for drivers to buy dual-fuel vehicles and for the auto industry to develop or import them.

It is expected that approximately 5,200 vehicles would be expected to receive this benefit within the five years. To encourage the re-fitting of the whole fleet of taxis, it is also proposed that the TWD25,000 refuelling vouchers can be used directly to offset the cost of their re-fit.

In addition, the Ministry of Economic Affairs plans a gradual increase in the construction of LPG filling stations, and is offering a subsidy of up to TWD10m for the construction of each one, with the aim of adding 150 of them within five years.

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