Buy a gas guzzler, get a green tax break

PUBLISHED : Sunday, 04 November, 2007, 12:00am
UPDATED : Sunday, 04 November, 2007, 12:00am

Incentives to buy fuel-efficient cars apply to eight-seaters. That's illogical, activists say

They have been the talk of drivers' forums on the internet for months - the gas guzzlers and limousines that, along with some hybrid-engined vehicles, qualify as environment-friendly and eligible for tax concessions from the government.

Now, the Sunday Morning Post has obtained the first figures for take-up of the concessions - and they show three-quarters of the drivers who have benefited from the incentives of up to HK$50,000 bought heavy seven- or eight-seaters rather than cars.

They were able to do so because vehicles qualify as fuel-efficient in the scheme based on weight.

Environmentalists said the criteria were illogical. An academic said the scheme offered subsidies for the rich to buy luxury vehicles.

Edwin Lau Che-feng, director of environmental campaign group Friends of the Earth, said calculating efficiency by weight meant that the heavier a vehicle, the more lenient the fuel consumption limit.

'Taking Nissan's vehicles, for example. Both the eight-seater Serena and seven-seater Lafesta have the same engine size, 2,000cc. Yet only the former is qualified as an environmental friendly vehicle because the engine is put in a heavier vehicle,' Mr Lau said.

Under the scheme, launched on April 1, buyers of newly registered, environment-friendly, petrol-powered private cars get a 30 per cent reduction on the first registration tax, subject to a ceiling of HK$50,000.

In the scheme's first six months, one in seven new private cars registered qualified for the tax reduction; 2,218 buyers received tax concessions totalling HK$50.7 million.

But just 23 per cent bought hybrid cars, including 50 who bought the 5-litre Lexus LS600hL luxury limousine. Three-quarters bought seven- or eight-seater minivans, or MPVs, with normal engines.

There were no takers for Volkswagen's 3.2 litre V6-engine Phaeton saloon - of which the government has bought 36 for senior officials - nor for the E350 Facelift Binz XL, a 3.5 litre, six-door stretch limo based on the Mercedes-Benz E350 saloon.

The Environmental Protection Department said the scheme was not aimed at promoting the use of any particular vehicle type and the standards were subject to annual review 'in the light of technological advances'.

But environmentalists and vehicle experts said the illogical criteria encouraged people to buy heavier vehicles which consumed more fuel.

According to the department, petrol-driven private cars qualify as environment-friendly if they meet two criteria:

Their emissions of hydrocarbons and nitrogen oxides do not exceed 50 per cent of the limits under the EU's Euro IV standard or Japan's 2005 standard; and

Their fuel efficiency, measured against their weight, is at least 40 per cent better than the average for the class of car to which they belong.

Mr Lau said it was illogical that the tax concession applied to heavier vehicles which used more fuel.

'This formula favours the purchase of luxurious vehicles, which goes against the government's objective to promote energy saving,' he said.

Ir Lo Kok-keung, of Polytechnic University's mechanical engineering department, said the qualifying standard was very 'tolerant' towards heavy vehicles. He criticised the government for wasting public money to benefit the rich who could afford such vehicles.

'The scheme encourages the rich people to take advantage of the tax concession to buy non-hybrid big vehicles,' Mr Lo said, citing the Transport Department figures.

'The tax incentives scheme apparently gives incentives for the rich to change to a bigger car,' he said.

'If the government wants to encourage the people to use hybrid cars, the tax concession should only be granted to those who will buy hybrid cars.'

Emissions of non-hybrid new vehicles were generally 60 to 70 per cent higher than those of hybrids.

A spokesman for the Environmental Protection Department said: 'The government will review the qualifying standard annually ... to restrict the tax concession to cars of truly outstanding emission and fuel efficiency performance.'