To what extent did the First Tax Registration Concession of EV changes in HK that was imposed in 2017 affected the negative externalities caused by diesel/petrol vehicles
To what extent did the First Tax Registration Concession of EV
Background
Electric vehicles (EVs) have no tailpipe emissions. Replacing conventional vehicles with EVs can help improve roadside air quality and reduce greenhouse gas emissions. A wider use of EVs also contributes to the development of environmental industries.
The Finance Secretary chairs a Steering Committee on the Promotion of EVs with members drawn from various sectors to recommend a strategy complementary with specific measures to promote the use of electric vehicles in Hong Kong, having regard to the resulting energy efficiency, environmental benefits and the creation of business opportunities.
In addition, the Government announced the Hong Kong Roadmap on Popularisation of Electric Vehicles (the Roadmap) on 17 March 2021, setting out the long-term policy objectives and plans to promote the adoption of EVs and their associated supporting facilities in Hong Kong. The Roadmap will guide Hong Kong’s future direction to attain zero vehicular emissions before 2050. This acts in concert with our other targets to strive for carbon neutrality in the same time frame, and forges ahead with the vision of ‘Zero Carbon Emissions ‧ Clean Air ‧ Smart City’.
Government’s Measures to Promote the Use of
Electric Vehicles
The Government has been promoting the use of EVs by the following measures:
- Offering first registration tax (FRT) concessions for EVs. FRT on electric commercial vehicles (including goods vehicles, buses, light buses, taxis, and special purpose vehicles), electric motor cycles and electric motor tricycles will be fully waived. For electric private cars, the concession arrangement is as follows:
- except for eligible private car owners (see ii. below), FRT for electric private cars will be waived up to $97,500.
- private car owners who arrange to scrap and de-register their own eligible old private car (private car with an internal combustion engine or electric private car) and then first register a new electric private car can enjoy a higher FRT concession up to $287,500 under the “One-for-One Replacement” Scheme.
The deadline for the above concession arrangement is 31 March 2024.
- Enterprises which procure EVs are allowed 100% profits tax deduction for the capital expenditure on EVs in the first year of procurement.
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A New Energy Transport Fund (previously named Pilot Green Transport Fund) has been put in place since March 2011 to encourage the transport sectors and charitable / non-profit-making organizations to try out and widely use green innovative and low carbon transport technologies (including electric commercial vehicles).
- The Government allocated $180 million for franchised bus companies to purchase 36 single-deck electric buses, including 28 battery-electric buses and 8 supercapacitor buses, for trial runs to assess their operational efficiency and performance under the local conditions.
- The Chief Executive announced in the 2019 Policy Address that the Government would prepare for a $2 billion pilot subsidy scheme to promote installation of electric vehicle charging-enabling infrastructure (“EVCEI”) in car parks of existing private residential buildings.
- The pilot subsidy scheme, namely the “EV-charging at Home Subsidy Scheme” (“EHSS”), is to help car parks of existing private residential buildings with multiple ownership resolve technical and financial difficulties that are encountered frequently when retrofitting EVCEI, and further facilitate car park owners to install EV chargers of their choice for charging EVs at home in the future in a simple and easy manner.
- The EHSS will run for about 3 years with a view to covering more than 60,000 private parking spaces. Application starts from 21 October 2020, and owners’ corporations, DMC managers or all owners collectively can submit applications. Processing of applications is on a first-come-first-served basis until the funding is used up.
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