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Gov't may offer excise tax cut to save auto industry: official

Gov't may offer excise tax cut to save auto industry: official

Taipei, Nov. 21 (CNA) The government is leaning toward offering car owners a reduction in excise taxes if they replace their old cars with new ones in a bid to save the local auto industry, an official of the Ministry of Economic Affairs (MOEA) said Friday.
The official made the remarks after a public hearing sponsored by ruling Kuomintang Legislator Lee Chia-chin on revitalizing the local auto industry amid the global economic downturn.
Industrial Development Bureau (IDB) chief Chen Chao-yi said that the bureau has been talking with the local auto industry since September to work out a strategy to boost slumping auto sales as the market has fallen to new lows.
The IDB is expected to propose that when car owners trade in an old car to buy a new one, they will get a break on the vehicle commodity tax, which is 25 percent for cars under 2000 c.c. and 30 percent for vehicles over 2000 cc.
The size of the tax reduction will depend on the age of the trade-in. Those exchanging cars that have been in circulation for under 10 years will get a bigger tax break, while those with cars used for more than 10 years will get a smaller reduction.
Because the adjustment in the commodity tax will involve a legal revision and a period of time, Chen expressed the hope that the revision will be made retroactive to Nov. 24.
The local auto market has suffered in recent years, but the global economic crisis and a lack of consumer confidence has sent local car sales spiraling down to new lows this year.
IDB statistics show that local annual auto sales dropped to 320,000 in 2007 from a peak of 510,000 in 2005.
It is estimated that no more than 200,000 to 220,000 vehicles will be sold this year.


Updated : 2021-10-26 07:44 GMT+08:00