Govt offers tax break on electric motorbikes
Govt offers tax break on electric motorbikes
The government is encouraging the use of electric motorbikes as part of efforts to reduce urban pollution.
The Ministry of Finance announced this week that the government would impose a lower excise tax rate on electric motorbikes purchased in the country from the start of the 2012-2013 fiscal year, which begins on October 1.
According to the announcement, people who buy an electric motorbike will pay an excise tax that is 20 percent lower than that charged for fuel powered motorbikes. The government hopes the new tax incentive will encourage more people to opt for electric motorbikes, amid a surge in the use of fuel powered vehicles.
The government imposes progressive tax rates on fuel powered motorbikes, which have a higher engine power. These bikes consume more fuel and release more greenhouse gases into the air, resulting in pollution.
People who buy fuel powered bikes with an engine power of less than 110cc will be charged 10 percent excise tax, while the purchase price of bikes with engines ranging from 111 to 150cc will carry a tax of 15 percent from October 1.
The government is offering an excise tax rate of 20 percent on bikes with engines ranging from 151 to 250cc and 25 percent tax on bikes with an engine above 251cc.
Laos has motorbike assembly plants that produce for the domestic market and imports some fuel powered bikes from Thailand and China. Electric motorbikes are imported from China.
The public welcomed the government's promotion of electric motorbikes, which are not only cleaner and more energy efficient but also create less noise pollution.
They say electric motorbikes are suitable for use in Laos because the country has strong hydropower potential which will provide cheap electricity in the future. The use of electric motorbikes would also help the government to save foreign currency by cutting fuel imports.
Fuel is one of the country's top five imports as the number of vehicles, including motorbikes, rises. In the 2010-2011 fiscal year, Laos spent more than US$107 million on fuel imports.
The government has also imposed new excise tax rates on cars, ranging from 25 to 150 percent of the basic purchase price depending on engine . The new tax rates enable the Ministry of Finance to set excise tax rates for cars within the set range.
The government plans to abolish the reference price of cars, which it uses for calculating the amount of excise tax. The move anticipates Laos' accession to the World Trade Organisation early next year. At present, the government maintains a reference price for cars and fuel, which are major sources of tax.
vientiane times
