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Hong Kong First Registration Tax

Discussion in 'Hong Kong' started by markwj, Feb 20, 2014.

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What do you think will happen to the Hong Kong EV 0% FRT Tax Break?

Poll closed Feb 25, 2014.
  1. It won't get renewed and EV incentives will be dropped.

    0 vote(s)
    0.0%
  2. It won't get renewed, but EVs given a FRT break somewhere between 0% and the hybrid discounts.

    0 vote(s)
    0.0%
  3. It won't get renewed, but EVs given the same FRT break as hybrids.

    0 vote(s)
    0.0%
  4. It will get renewed for a short time (1 or 2 years).

    54.5%
  5. It will get renewed for another 5 years.

    45.5%
  1. sonywong

    sonywong Member

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  2. lx3h

    lx3h Charged.hk's Director of Education

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    #82 lx3h, Mar 27, 2014
    Last edited: Mar 28, 2014
    This is what I wrote on my blog today in response to the video.

    Dr. Fernando Cheung is really unintelligent and he should learn more about the EV productions and battery recycling first before making his points. He should read what I have included below or go read some articles from Tesla Motors Club. There are tonnes of members who have done their research for you, you just need to click and read up.

    Dr. Kwok Ka-ki might as well stop using his smartphones and tablets, or even start suggesting taxing smart devices users in Hong Kong because with one more electric device, there will be more greenhouse gases emitted, and there will be energy loss in the process of making it, energy loss in transmission, bla bla bla... Mind him, the total electricity used in charging all smart devices alone in the entire Hong Kong is many times more than the electricity used in EVs! Considering the smartphone penetration in Hong Kong is 87%!!! As for Norway, quoting from The Guardian,

    "Battery-powered cars in the world's fourth richest country are not just exempt from high rates of purchase tax, and VAT, but pay no road and ferry tolls or parking fees, cost less to insure and can be charged up for free electricity from thousands of points. Local government will also subsidise the installation of charging points in homes. Research suggests the subsidies could be worth nearly £5,000 a year per car."

    So FRT is nothing when compared to the EV push in Norway.

    I do agree that EVs are not actually a solution to reduction of greenhouse gases, green energy is, and that's why Tesla works with sister company SolarCity to install solar panels everywhere in the States. Hong Kong government should really do something with green energy, then the EVs will truly be green. Which gasoline vehicle can truly be green? None! None!

    Every car creates certain level of pollution during manufacturing, and I say "every car", so do not target the EVs. EV batteries can become pollutants if not well-handled, like every part of gas vehicle, but for one thing, EV batteries can be recycled in an contained environment to minimise pollution. You tell me, which parts of the gas vehicle batteries can be recycled?

    FRT waiver does not mean the Hong Kong government is using tax payers' money to subsidize the EV buyers, it just means that the government is not going to earn the buyers' money as tax.
     
  3. DITB

    DITB Charged.hk co-founder

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    Very well written, l3xh.
     
  4. lx3h

    lx3h Charged.hk's Director of Education

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    Thanks.
     
  5. markwj

    markwj Moderator, Asia Pacific

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    Interesting comparison:

    Game changer - The Standard

     
  6. markwj

    markwj Moderator, Asia Pacific

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  7. markwj

    markwj Moderator, Asia Pacific

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    #87 markwj, Nov 3, 2015
    Last edited: Nov 3, 2015
    Following is a question by the Hon Fernando Cheung and a written reply by the Secretary for the Environment, Mr Wong Kam-sing, in the Legislative Council today (November 4):

    LCQ9: Exemption of payment of first registration tax for electric vehicles
    Annex 1: http://gia.info.gov.hk/general/201511/04/P201511040377_0377_154588.pdf (note: currently seems broken/empty pdf)
    Annex 2: http://gia.info.gov.hk/general/201511/04/P201511040377_0377_154589.pdf
    Annex 3: http://gia.info.gov.hk/general/201511/04/P201511040377_0377_154590.pdf

     
  8. Optic

    Optic Member

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    Too bad, I was hoping they would get some tax from i8 owners and subsidize the build out of some more medium chargers.
     
  9. markwj

    markwj Moderator, Asia Pacific

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    Yeah, with some 20+ i8 in HK, that must be 25 million at least in the debit column.

    One figure interesting from the Annex is that EV adoption in 2014-15 is 81 times that of 2013-14. That is a pretty amazing rate.
     
  10. waidy

    waidy Member

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    I think another arguement, by promoting EV by eliminating FRT would save them money in health care (as the air is cleaner and less people get sick).
     
  11. lx3h

    lx3h Charged.hk's Director of Education

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    1) As always, what's not taxed is not lost, it is just not earned. I wonder how much they have taxed through plastic bags, or

    2) The amount of CO2 emission cut because of EV is not taken into account. Carbon emission is actually worth a lot of money.

    3) Those 3000 EV / 780,000 private cars in Hong Kong = 0.38% of cars are EVs. Tax waived may be great, but tax income of the other 99.62% is much much much greater. It is like, you have earned 99.62%, and yet complain about the 0.38% of money you gave to cleaner air. For my stats, visit: Tracking progress of EVs into Hong Kong - Page 7
     
  12. gubes

    gubes Member

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    The government, I think, would only reconsider the FRT waiver if EVs start becoming a lot more significant in numbers on the road. Less than 3,000 vehicles registered is not that significant. However, the rate of growth is so explosive that they may start to consider it once the number exceeds 10 or 20 thousand.

    In general though I think FRT rate should always be calculated based on emissions (combination of CO2 & NOX) and not the price of the car only.
     
  13. markwj

    markwj Moderator, Asia Pacific

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    In general, I agree, but how to measure emissions for non-pure-EV? The VW scandal (which really shouldn't come as too much of a surprise as it has been pretty clear for years that the automotive manufacturers have been cheating on emissions tests for decades) highlights this.

    For example: 269 VW "Caddy" diesel vehicles in Hong Kong got classified as 'green' and got a resulting FRT tax concession.

    news.gov.hk - Environment - VW Caddy model banned

    Normally, road tax would be the way to handle this (rather than first registration). The first registration concession is to offset the higher cost of the vehicles.

    But problematic is if a scale was used 0 emissions = $0, N emissions = $N, then buses and trucks would be paying HK$100,000+ a year in road tax.
     
  14. gubes

    gubes Member

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    Well, Dieselgate aside, at some point you would have to trust an independant emmissions testing agency. Inaccuracies in the test are to be expected - however, in the end its a better way to apply at tax rate on a vehicle than purely the amount it sells for or the capacity of the engine (some highly turbocharged small capacity engines can emit more emmissions than larger naturally aspirated vehicles for instance).

    If it were me I would use Emmissions as the key determinant of BOTH Registration fee and FRT.

    Something like:

    0% and 0 Registration fee for EVs or zero emmission vehicles

    25% for cars with CO2 emmissions below 50g/km (some hybrids could be in that category - hard to achieve) & Liscence fee of HK$2,000

    50% for cars with CO2 emmissions below 100g/km & Liscence fee of HK$4,000

    75% for below 135g/km & Liscence fee of HK$8.000

    125% for all cars above 135g/km & Liscence fee of HK$13,000

    Tax is not progressive and applied to the whole value of the car. I just used the above as an example. Ideally, it should be a scoring system based on a combination of CO2 & NOx

    In the end you would want a system that would be close to Revenue neutral but highly encourage people to purchase low emmission vehicles over high emmission ones. Similar incentives should be in place for companies and government departments to adopt low emmission or electric powered commercial vehicles and public buses and taxi fleets.
     
  15. markwj

    markwj Moderator, Asia Pacific

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    The revenue neutral approach might be the key.

    What if FRT went UP for non-qualifying and DOWN for qualifying vehicles? Adjust it every year, or so, to make it revenue neutral.

    The idea is that polluting vehicles get more expensive the more non-polluting vehicles are on the road.

    Of course, at some point the whole thing collapses, where everyone is buying non-polluting vehicles and the tax on polluting vehicles is HK$100million/vehicle.
     
  16. Optic

    Optic Member

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    FRT is not an environmental tax, it is a tax that is meant to deter drivers. FRT exemption is an incentive for EV cars. This means EV should be taxed even though EVs don't have tail pipe emission, because EVs still use the HK roads and congests streets. To have a higher acceptance of EVs, we can instead choose to INCREASE FRT for all cars and DETER ICE cars rather than incentivitize vehicle ownership. In a way, isn't this what China is doing? IMHO EVs should not be tax free (in the future).

    Perhaps what you are proposing should be an EXTRA emissions tax for ICE on top of FRT. Which I fully support. Once again, if we are true tree huggers we should be promoting public transit. ie. tax cars and use the revenue to build out more MTR.
     
  17. Silverbird

    Silverbird Member

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    I think i8 is not tax free, their prices are over 2 million.
     
  18. Lee Tsui

    Lee Tsui Member

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    Because i8 is a hybrid and not a true electric.

    The i3 is 0% FRT because it is an EV, the range extended version of the i3 which would be quite useful. Is not even sold in HK because it too is liable for FRT for merely a range extending lawnmower engine inside it.

    That's how it works dude.
     
  19. gubes

    gubes Member

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    FRT is not that effective at deterring drivers...it's good at deterring new car buyers of expensive cars. In the end, you end up buying a cheap used car of low value.

    - - - Updated - - -


    Well ill if we got the point that the majority of vehicles in the road are EVs then at some point, you could understand a tax on EVs too so long as it is a lot less than high emission vehicles
     
  20. Optic

    Optic Member

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    You guys are right, i always thought the i8 full electric. Glad those guys are paying tax! Then the current exemption makes sense since there is no $2m sports car that is getting tax exempted....
     

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