Revised system for motor vehicles First Registration Tax
The Financial Secretary announced in his Budget Speech today (March 5) the adjustment to the tax system and rates under the Motor Vehicles (First Registration Tax) Ordinance with effect from 2.30 pm on March 5 pursuant to the Public Revenue Protection (Revenue) Order 2003.
The revised tax system has the following changes -
(a) adjusting the tax rates for different classes of motor vehicles; and introducing a marginal tax system for private cars and van-type light goods vehicles not exceeding 1.9 tonnes as detailed below :
Item Class of Motor Vehicle Rate of Tax %
1. Private cars-
a. on the first $150,000 35
b. on the next $150,000 75
c. on the next $200,000 105
d. on the remainder 150
2. Taxis 3.7
3. Public light buses and 3.7
private light buses
4. Public buses, except buses which are
to be used solely in connection with
operating a public bus service under
the Public Bus Services Ordinance
(Cap. 230) or under the Kowloon-Canton
Railway Corporation Ordinance (Cap. 372)
within the North-west Transit Service
Area as defined in the Ordinance 3.7
5. Private buses, except buses which are
to be used solely in connection with
the training of drivers for the purposes
of operating a public bus service
under the Public Bus Service Ordinance
(Cap. 230) or within the North-west
Transit Service Area under the
Kowloon-Canton Railway Corporation
Ordinance (Cap. 372) 3.7
6. Motor Cycles 40
7. Motor tricycles 40
8. a. Goods vehicles, other than van-type
light goods vehicles 15
b. Van-type light goods vehicle
not exceeding 1.9 tonnes permitted
gross vehicle weight -
(i) on the first $150,000 35
(ii) on the next $150,000 75
(iii) on the remainder 105
c. Van-type light goods vehicle
exceeding 1.9 tonnes permitted
gross vehicle weight 17
9. Special purpose vehicles 3.7
(b) abolishing the exemption for first registration tax (FRT) for vehicle accessories, namely air-conditioners, audio equipment and anti-theft devices, and warranties provided by vehicle distributors;
(c) requiring a registered distributor and/or vehicle owner to declare the purchasing of warranties (in addition to the fitting of accessories) and to pay additional FRT if the fitting or purchase is made within six months (instead of three months as previously) after first registration; and
(d) requiring registered distributors, associated persons, and registered owners to keep the records of the distribution, sale and purchase of the vehicles and any accessories and warranties fitted or obtained within the first six months of first registration of vehicles for 30 months from the date of first registration for inspection when required.
"The revised system aims to remove unnecessary compliance costs on the part of motor traders and plug a loophole for tax evasion by abolishing the tax-exempted items. The Government have consulted the motor trade on these proposals and have received general support," a TD spokesman said.
" The revised system does not apply to motor vehicles first registered with full payment of FRT before the new system comes into effect." the TD spokesman added.
Revised application forms incorporating the above changes are available for distribution at the licensing offices and downloading at TD website. The TD spokesman said "there would be no change to the application procedures for registration of motor vehicles under this revised system."
However, the spokesman emphasized the need for vehicle owners and distributors to make declaration on the purchasing of warranties or fitting of accessories within six months after first registration, and to keep proper records, e.g. invoices and agreements, of the distribution, sale and purchase of vehicles and the accessories and warranties as required under the revised system.
In order to raise additional government revenue, the tax rates for more expensive cars are increased, and the tax becomes more progressive. In response to the trade's request, we are also introducing a marginal tax system which is more equitable.
For revenue protection purpose, the proposed tax system and rates are implemented with immediate effect upon announcement in the Budget Speech. The relevant amendment legislation will be introduced into the LegCo for consideration in the normal manner in due course.
If members of the public have any enquiries, they can contact the Transport Department at the following telephone numbers:
TD Hotline : 2804 2600
Hong Kong Licensing Office : 2804 2637
End/Wednesday, March 5, 2003
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