Taiwan to cut tax on LPG bi-fuel vehicles

The draft, which calls for lowering the commodity tax on LPG vehicles for five years by NT$25,000 (US$775) per vehicle, is expected to also encourage the local automobile industry to develop or import more environmentally-friendly cars, officials said.

Currently, none of Taiwan's carmakers produce or import bi-fuel cars, which in Taiwan are mostly modified by local carmakers from cars that use regular gasoline or diesel, officials said.

Premier Wu Den-yih said that promoting high-efficiency and low pollution vehicles is a major government policy. He added that the government's aim is to decrease air pollution and achieve the target of reducing carbon emissions.

Wu said that the Cabinet would like to complete the legislative procedures as soon as possible. The Ministry of Finance and the Environment Protection Administration (EPA) will closely coordinate with lawmakers to seek their support.

The commodity tax reduction for bi-fuel cars is expected to be launched from 2010, according to local media reports.

Under the existing Commodity Tax Act, automobiles with engine displacement under 2000cc are taxed on an ad valorem basis at 25 percent of the factory price; while autos with over 2,001cc are taxed at 30 percent.

The Finance Ministry estimated that the tax incentive will create a demand for 5,200 bi-fuel cars, but that the government will receive NT$136.5 million less in tax revenue in the five years time.

According to EPA data as of Nov. 10, there are 21,050 bi-fuel cars in Taiwan.

EPA Minister Stephen Shu-hung Shen said Wednesday that he expected the number of LPG bi-fuel vehicles in Taiwan to reach 150,000 by 2012.

A modified LPG bi-fuel car can save 40 percent on fuel cost, and reduce carbon emissions by at least 30 percent, Shen added.

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