Taiwan's Cabinet approved on Thursday a draft amendment to the Vehicle License Tax Act that would extend the license tax exemption period of electric vehicles for a period of four years until the end of 2025.

Currently, Article 5 of the Act stipulates that municipal or county (city) governments can exempt electric vehicles from the vehicle license tax until Dec. 31, 2021.

According to the revised Article, the exemption period will expire on Dec. 31, 2025, the Ministry of Finance said in a statement.

The ministry said it proposed the draft revisions extending the vehicle license tax exemption period to encourage the use of low-emission electric-powered vehicles, foster the development of the EV industry and create a sustainable environment.

Another amendment approved Thursday was the removal of a provision stipulating that if the owner of a vehicle fails to pay off vehicle license tax before the deadline, a surcharge of 1 percent will be added to the overdue tax for every two days of default, and vehicles that are 30 days or more in arrears with tax payments will be referred to the court for compulsory enforcement.

In addition, tax offices will take charge of collecting overdue taxes, according to the new rules.

The bill has been submitted to the Legislative Yuan for review, according to the ministry.

The four-year exemption extension would cut into government revenue by about NT$3 billion (US$107.59 million), Finance Minister Su Jain-rong (???) said Thursday after a regular Cabinet meeting.

Su said that the ministry has also submitted a proposed draft amendment to the Commodity Tax Act to the Cabinet for approval.

That amendment will extend the commodity tax exemption period for electric automobiles and motorcycles, which expires on Dec. 31 this year, for another four years until the end of 2025.

However, the tax exemption only applies to electric motorcycles and cars valued at less than NT$1.4 million, according to the law.

The exemption extensions are expected to boost the production value of electric vehicles and motorcycles by nearly NT$77.5 billion, generate NT$33.2 billion in value for the service industry, create 25,000 jobs and increase the total number of electric vehicles on the roads in Taiwan to 337,000 over the next four years, according to Su.

Source: Focus Taiwan News Channel