Key Facts
• Gasoline tax includes excise and local excise taxes, totaling 53.8 yen per liter.
• Additional taxes: Petroleum and coal tax (2.8 yen) and 10% consumption tax.
• Approximately 40% of gasoline retail price consists of taxes.
• The ‘provisional tax rate’ adds 25.1 yen per liter to the base tax of 28.7 yen.
• Introduced in 1974 for road development funding, reaching current levels in 1979.
• Officially abolished in 2010 but renamed as ‘temporary tax rate’ and maintained.
• Trigger clause: Reduces tax if prices exceed 160 yen/liter for 3 months; frozen since 2011.
• As of July 28, 2025, average gasoline price is 174 yen/liter.
• Government subsidies: 10 yen/liter since May 2025, increased to cap prices at 175 yen/liter.
• Abolishing the provisional tax rate could save households 7,155 yen annually.
• Estimated tax revenue loss: 1.5 trillion yen annually for national and local governments.
Summary
The ‘provisional tax rate’ on gasoline, introduced in 1974 to fund road development, has been a significant component of Japan’s gasoline tax structure. Despite its formal abolition in 2010, it persists under a new name, contributing 25.1 yen per liter to the total tax. Currently, taxes account for 40% of gasoline prices, with the national average at 174 yen per liter as of July 2025. The government has implemented subsidies to stabilize prices, capping them at 175 yen per liter. If the provisional tax rate is abolished, households could save 7,155 yen annually, but this would result in a 1.5 trillion yen annual tax revenue loss. The trigger clause, designed to reduce taxes during price surges, remains frozen since 2011. The debate over the tax’s future continues, balancing household relief against fiscal impacts.
