The import tax rate on new cars into Vietnam from ASEAN nations will be reduced sharply from 2007 from the current rate of 90 per cent, Saigon Economic Times Weekly quoted the Ministry of Finance’s source as saying.
The import duties rate on automobiles of more than nine seats will be cut to 20 per cent in early 2007, 10 per cent in 2008 and 5 per cent in 2009, revealed the Finance Ministry’s negotiation plan with ASEAN nations on the CEPT/AFTA tax roadmap, which has been submitted to the Government.
Meanwhile, the import tariff rate on passenger cars of less than nine seats will be lowered to 20 per cent in 2007, 10 per cent in 2008 and 5 per cent in 2010, it said.
Early this year, Vietnam also cut by 10 per cent the import tax on automobiles from ASEAN countries from 100 per cent.
Deputy Minister of Finance Truong Chi Trung said, the tax cut is compulsory as Vietnam integrates further into the regional and world economy. “As Vietnam enters the WTO, the discriminations between domestic firms and foreign partners must be removed,” he added.
Trung said, this year secondhand cars will still be imposed the absolute tax, a fixed amount of tax for every car regardless of the price, model or origin of the vehicle, from May 1, 2006.
However, the tax on used cars will also be dropped in accordance with Vietnam’s international commitments.
With the absolute tax in combination with the special consumption tax and value-added tax, the gross taxes will be equal to over 600 per cent of the cars import price, according to calculations from the Ministry of Finance.
As a result, the price of a used car imported into Vietnam is equal to around 70 per cent of the price of a new one.
The hopes of buying cheap used cars have driven down auto sales of 11 foreign-led carmakers in the country to just over 4,700 vehicles, down 14.6 per cent, in the first three months of this year.
Saigon Economic Times, Vnexpress
Vietnamese
