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Japan to weigh raising tax on EVs as it fears revenue decline

Policymakers look for flat-tax alternatives to ensure infrastructure funding

The all-electric Porsche Taycan is readied for a test drive near Tokyo. EVs in Japan are taxed at a flat rate. (Photo by Suzu Takahashi)

TOKYO -- Japanese policymakers will consider changes to a flat local tax on electric vehicles to head off a potential drop in revenue as drivers shift away from more heavily taxed gasoline cars.

Local automobile taxes have a class component based on engine size that ranges up to 110,000 yen ($789) a year, but that is set at 25,000 yen for EVs and fuel cell vehicles. That makes EVs the least-taxed autos, apart from minicars.

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