The Ministry of Finance is collecting ideas from various agencies about imposing an absolute tax on imported secondhand cars, a ministerial official said.
The absolute tax application proposal will be submitted to the Government for approval next month, he said.
The absolute tax is a fixed amount of tax on every car regardless of its model or origin, he explained, “Absolute tax is an easier way to manage trade frauds.”
If the government passes the taxation proposal, it will be implemented right away on May 1, 2006 when used cars will be officially permitted to enter Vietnam.
However, there are several kinds of vehicles which will not be subjected to the absolute tax but a percentage tax - the tax revenue would increase in the same proportion as the price.
“Competent authorities are discussing measures that will make imported used cars too cheap compared with locally made vehicles,” deputy minister of finance Nguyen Chi Trung said.
The recently approved import duties on imported used cars of less than 16 seats and of less than five years old is 150 per cent. Apart from import tax, a used car consumed in Vietnam will burden other duties including special consumption of around 50 per cent, VAT of 10 per cent.
According to a car dealer in Hanoi, a secondhand car may be sold at prices of seven times higher than in foreign nations.
The responsible bodies are also imposing technical norms on imported old cars in order to avoid turning Vietnam into a dumping site for the world automotive industry, however they may need more time and human resources, he added.
The permission for the entry of used cars is being strongly protested by local carmakers who fear massive influxes of old cars will destroy the country’s infant auto industry.
Car sales in the Southeast Asian nation have consecutively dropped since the proposal about the import of used cars was mulled over in the middle of last year. Last year, car sales by 11 operational foreign-led carmakers were down 12 per cent to 35,264 units.
VNexpress
Vietnamese
