Financial Secretary Paul Chan announced on Wednesday that the government will extend tax concessions for electric vehicles for two years, but the amount will be cut by 40 percent.

The concessions were first introduced in 2018 and were due to expire at the end of next month.

The maximum first registration tax concession for electric private cars will be cut from HK$97,500 to HK$58,500.

Under a scheme designed to encourage car owners to scrap their old cars and swap them for electric vehicles, they can now receive rebates of up to HK$287,500 for the first registration tax.

The allowance will be reduced to HK$172,500 from April.

The government said the new tax breaks will cover applications for the “one-for-one replacement” scheme targeting buyers switching to electric cars and first registrations for such private vehicles submitted from April 1.

Electric private cars purchased before Thursday and those set to be shipped to Hong Kong would be entitled to previous concessions, as long as their applications were approved by the Transport Department.

Chan said in his budget speech that while the government would continue to encourage people to use electric vehicles, it would reduce the rebates “given the price reduction of electric vehicles and increasing availability of vehicle options”.

For electric vehicles costing more than HK$500,000 before tax, Chan said owners will not be entitled to any concessions, in line with the “affordable users pay” principle.

He said the tax for other types of electric vehicles, such as commercial vehicles, motorcycles and motor tricycles, will be completely waived over the next two years.
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Last updated: 2024-02-28 HKT 16:20