The Vietnamese Ministry of Finance has announced to cut automobile import tariffs to between 72% and 82% next year from current 83%.
The import tax on vehicles with less than nine seats and having a cylinder of 1.8–2.5 liters will be cut 1 percentage point to 82%, but those with a cylinder of more than 2.5 liters will see a more substantial rate cut of 6 percentage points to 77%.
New import tariff for four-wheel drives, meanwhile, will be 5 points lower at 72%.
The adjustments, to be effective on January 1, are in line with Vietnam’s commitments to the World Trade Organization (WTO) and ASEAN.
Under the WTO commitments, Vietnam will levy a tax rate of 83% on imports of complete built unit (CBU) cars next year while the rate committed to ASEAN is 70%. Respective committed tax rates for four-wheel drives are 73% and 70%.
Industry insiders said though the import tax cut was marginal, it became significant when other taxes including special consumption tax and value added tax, which will be also affected by the import tax, were taken into account.
Prices of imported cars heavily depend on the dollar exchange rate and cannot be reduced further if the forex rate remains at high level as presently, director of a Hanoi-based auto firm said.
Most consumers would now wait for next year to purchase cars, the director said.
Vietnam spent $2.556 billion importing cars and components in the first 11 months of this year, falling 3.9% from a year earlier. The imports of CBU cars dropped 10% at $801 million as volume was down at the same rate to 8,000 units.
Car import is among main factors causing the country’s trade deficit to widen over the years. (Youth, Pioneer)
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