The Vietnam Automobile Manufacturers Association (VAMA) has announced that the prices of cars in Vietnam will increase from January 1, 2005 due to higher special consumption tax rates, blowing away car hunters’ expectations of lower car prices in the country resulting from falling import taxes on cars.
VAMA said next year the special consumption tax (SCT) on cars of less than five seats, cars of 6-15 seats and cars of 16-23 seats will be raised to 50 per cent, 30 per cent and 15 per cent from the current 40 per cent, 25 per cent and 12.5 per cent, respectively.
With the new tax rates, the retail prices of autos will surely be higher, a VAMA official said.
The rumors of decreased car prices have triggered negative effects on car sales in recent months, he said. In October, car sales by foreign-led joint ventures were down 31 per cent on-year to 3,358 units.
However, according to local media, the Ministry of Finance announces the forecast of lower car prices, which is in charge of taxation policies in Vietnam.
Finance Minister Nguyen Sinh Hung said at the National Assembly that it is unwise to raise prices of locally assembled cars in line with the new tax rates because import duties on autos will be cut by 30 per cent, 20 per cent and 10 per cent, depending on kinds of cars.
“From now on, if prices of locally made cars are raised, more cars will be imported to sell in the country,” Hung said on the fringe of the National Assembly’s current meeting.
However, according to local media, locally made cars have more advantages because local banks are willing to lend too car hunters to buy Vietnamese cars. Currently, 40 per cent of car sales are related to bank loans.
B.T
Vietnamese
