One thing that strikes me when I drive in Japan is how expensive gasoline is. The main reason why gasoline is so expensive is because there are so many taxes involved. These taxes are included in the price of the car, so it may seem that the user is paying them directly, but they are basically indirect taxes levied on the business companies. The price of gasoline and diesel oil fluctuates with the price of crude oil, so it depends on the time of year, but it is safe to say that about half of the price of a vehicle were just taxes. Gasoline is subject to the “gasoline tax,” the “petroleum and coal tax,” and the “consumption tax. These issues will be explained in detail.
Furthermore In the following article, I wrote about the cost of maintaining a car in Japan, if you would like to read it.
Gasoline Tax
The gasoline tax is a national tax that formerly was a purpose tax used for road maintenance, but became an ordinary one in 2009 due to tax reform. The national government collects taxes from businesses, but the local gasoline tax portion is distributed to the local governments. The gasoline tax amount is 48.6 yen per liter and 5.2 yen for the local gasoline tax with the total of 53.8 yen.
Originally, the gasoline tax was 24.3 yen per liter and the local was 4.4 yen per liter, but the current tax rate have tentatively increased as a make up for the shortage of financial resources in the Five-Year Road Improvement Plan that started in 1973. Since then, the provisional measure has been repeated endlessly in an uncontrolled manner, and the “provisional” measure is still in effect today, nearly 50 years later. In 2018, the tax revenue was 2.33 trillion yen for the gasoline tax and 249.3 billion for the local.
Incidentally, there is an exception to the gasoline tax. In Okinawa Prefecture, the gasoline tax is reduced by 7 yen per liter under the “Law Concerning Special Measures in Connection with the Return of Okinawa to Japan, but the tax was reduced by 5.5 yen per liter because the prefecture collects 1.5 yen under the “Okinawa Prefecture Petroleum Price Adjustment Tax Ordinance. For this reason, gasoline tends to be cheaper in Okinawa Prefecture.
Petroleum and Coal Tax
The petroleum and coal tax are ordinary taxes with no specific use and are national taxes. They are national taxes, but their use is complicated as it is recorded as general revenue and then transferred to a special account in accordance with the Coal, Oil and Alternative Energy Special Account Law. The tax is used for state and private oil reserves and alternative energy.
In addition to the petroleum and coal tax, there is a “Global Warming Prevention Tax” which is a national tax with the purpose of reducing carbon dioxide emissions from all fossil fuels and strengthening measures to combat global warming. Incidentally, on top of the coal tax this tax is levied not only on gasoline and diesel oil, but also on electricity and gas.
The coal tax is also included in the price users pay for fueling as an indirect tax. The amount of the tax is 2.8 yen per liter, and the revenue in 2018 was 827.3 billion yen.
Consumption Tax
The petroleum and coal tax are ordinary taxes with no specific use and are national taxes. They are national taxes, but their use is complicated as it is recorded as general revenue and then transferred to a special account in accordance with the Coal, Oil and Alternative Energy Special Account Law. The tax is used for state and private oil reserves and alternative energy.
In addition to the petroleum and coal tax, there is a “Global Warming Prevention Tax” which is a national tax with the purpose of reducing carbon dioxide emissions from all fossil fuels and strengthening measures to combat global warming. Incidentally, on top of the coal tax this tax is levied not only on gasoline and diesel oil, but also on electricity and gas.
The coal tax is also included in the price users pay for fueling as an indirect tax. The amount of the tax is 2.8 yen per liter, and the revenue in 2018 was 827.3 billion yen.
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