VietNamNet Bridge – When automobile manufacturers’ association reported the sharp falls in the car sales, big worries have been raised--not only to the manufacturers, but to local authorities as well. This is simply because this is the main source of income of the localities.

“The businesses have been driven into a lamentable position. The sharp fall of 40 percent in the car sales have made Vinh Phuc province suffer, because this has led to the sharp fall of the collected tax to the state budget,” Dai Van Gioi, Deputy Director of the Vinh Phuc provincial Planning and Investment Department complained at a meeting with the officials from the Ministry of Planning and Investment.

Gioi said Vinh Phuc has been assigned to collect 17,500 billion dong to the state budget. The provincial people’s council has also assigned the task of collecting tax to the provincial budget. However, it is foreseeable that the total sum of money to be collected would be 13,600 billion dong only.

Gioi admitted that if this happens, this would be a sharp decrease of income to the budgets. This has been attributed to the decline of the automobile sales. Meanwhile, the receipts from automobile manufacturers have always been the main source of income of the province.

Vinh Phuc has been cited as a typical example showing the heavy reliance of the local industry development on the automobile and motorbike industries. This is the locality where the two biggest manufacturers, Honda and Toyota, set their production bases.

In 2011, Toyota Motor Vietnam sold 30,000 cars and paid 16 trillion dong to the local budget. Meanwhile, in the first eight months of 2012, Toyota could pay 7 trillion dong only due to the sharp sales falls.

A report by the Vinh Phuc taxation body shows that with the car sales fall, the local budget may witness the deficit of some 1 trillion dong in 2012.

Hai Duong province is believed to be less dependent on the automobile industry, but it has also reported the sharp decrease in the tax collection due to the car sales problems. The northern province has been listed among the biggest tax collectors over the last few years with the existence of Ford’s automobile assembling factory there.

However, by the end of August 2012, the US car manufacturer had sold 2332 cars only, or just 30 percent of the planned sales. Therefore, it only paid 419 billion dong worth of tax to the budget, equal to 25 percent of the estimates and 43 percent of that of the same period of the last year.

The Hai Duong provincial taxation agency has estimated that the collected tax to the budget would be some hundreds of billions of dong due to the lower tax pay from Ford.

In such conditions, at the ceremony on launching the first Focus car, Chair of the Hai Duong provincial people’s committee, Nguyen Manh Hien, said he many times advised the agencies and organizations in the locality to choose Ford’s models when they intend to buy cars, considering this a behavior of sharing difficulties with the enterprise which always pays the highest tax sums to the local budget.

The central province of Quang Nam, where the Truong Hai Automobile Corporation sets up its factory, has suffered from the same problem.

In 2011, the leading domestic automobile manufacturer sold 32,474 cars and paid 4141 billion dong to the budget. Meanwhile, in 2012, the taxation body expects a lower tax sum from Truong Hai, about 2115 billion dong.

TBKTVN