LCQ12: Review on FRT & licence fee of van-type light goods vehicle

Following is a question by the Hon Leung Yiu-chung and a written reply by the Secretary for the Environment, Transport and Works, Dr Sarah Liao, at the Legislative Council meeting today (October 22) :

Question:

It is learnt that before 1991, as there were substantial differences between the first registration taxes and licence fees for vans and private cars, and saloon cars with a carrying capacity of seven passengers were not yet widely available, some car owners had converted their vans into passenger carrying private cars.  In order to curb such conversions, the first registration tax and licence fee for vans were increased in 1991. However, with the increasing popularity of saloon cars with a carrying capacity of seven passengers, the number of such conversions has decreased since the 1990's. In this connection, will the Government inform this Council whether:

(a) the authorities have reviewed the first registration tax and licence fee for vans in the past two years; if so, of the review results; if not, the reasons for that;

(b) it will consult the trade on the need to reduce the above first registration tax and licence fee; if so, of the details; if not, the reasons for that; and

(c) it will reduce the above first registration tax and licence fee; if so, of the details; if not, the reasons for that?

Reply:

Madam President,

Before 1991, some car owners took advantage of the low tax rate and licence fee of goods vehicles and used van-type light goods vehicles as private cars.  This undermined the effectiveness of the measures aimed at discouraging private car ownership, and resulted in the proliferation of van-type light goods vehicles on the road which aggravated traffic congestion. To address this problem, the first registration tax rate and licence fee for van-type light goods vehicles were increased in 1991 to reduce the differential between the tax rates and licence fees of such vehicles and private cars.

The Hong Kong Union of Light Van Employees approached the Transport Department in early 2002 to request a review of the first registration tax rate and licence fee for van-type light goods vehicles.  The Administration accordingly conducted a review which showed that the reduction in the first registration tax rate and licence fee differential between van-type light goods vehicles and private cars was effective in containing the growth of van-type light goods vehicles and curbing the use of van-type light goods vehicles as private cars between 1991 and 2002.  The number of van-type light goods vehicles dropped from 66,200 in end 1991 to 44,928 in end September 2002, a decrease of 32 per cent.

The review concluded that the present first registration tax rate and licence fee differential between van-type light goods vehicles and private cars should be maintained to prevent the recurrence of van-type light goods vehicles being used as private cars.  The Transport Department advised the Hong Kong Union of Light Van Employees in August 2003 that the licence fee of van-type light goods vehicle would not be varied while the first registration tax rate would be adjusted in line with that of private vehicles in the context of the 2003/04 Budget. The adjustment was subsequently approved by this Council.  

Ends/Wednesday, October 22, 2003