When will taxes be lowered to reduce automobile prices?

The government has affirmed its policy to encourage the development of the automobile industry. However, the ‘encouragement’ is not attractive in the eyes of manufacturers.

On November 11, the Government Office released a notice about the Deputy Prime Minister Trinh Dinh Dung’s conclusion at the meeting discussing solutions to develop the automobile industry, which gathered representatives of ministries,  the Vietnam Automobile Manufacturers' Association (VAMA), and enterprises.

When will taxes be lowered to reduce automobile prices?

Dung assigned the Ministry of Finance (MOF) to join forces with the Ministry of Industry and Trade (MOIT) and the State Bank of Vietnam (SBV) to suggest policies on tax and credit to facilitate the development of the automobile and supporting industries.

One of the ‘bottlenecks’ that hinders the development of the automobile industry is tax policy. The current luxury tax is reported as not attractive enough to encourage enterprises to expand domestic manufacturing and assembling.

Meanwhile, the automobile industry is defined as an important industry in the economy, which serves as a driving force for industrialization and modernization, helping Vietnam escape the middle income trap.

A source said that a working group on the automobile industry will be set up with members from MOF, the Ministry of Planning and Investment (MPI), MOIT and SBV. The working group will be in charge of building policies on tax and preferential credit for the automobile industry.

One of the important policies to be considered is the luxury tax. The current high tax rate is believed to lead to a restriction in using cars, which makes it difficult for the automobile industry to develop.

The working group will also work on policies to give incentives to enterprises which make investment in manufacturing car parts. There will also be preferential credit packages for automobile supporting industries (car part manufacturing) and for buyers of domestically-made cars.

 

Prior to that, in Resolution 115, on the solutions to promote supporting industries dated August 6, 2020, the government asked MOF to amend the luxury tax policy and submit the draft amendments to the National Assembly’s 10th session. However, to date, the draft of the new policy has not been submitted.

The proposal on amending the luxury tax law, under which the dometically made car parts are not counted when calculating taxable value, was made by MOIT in 2017. However, the tentative tax policy has not occurred yet.

Analysts say that enterprises have to wait too long for policies. While Vietnam has opened the market widely to imports, its ministries are still discussing the solutions to support the domestic production.

MPI has also questioned why the solution on luxury tax proposed by MOIT a long time ago still cannot be implemented. If the solution is applied, car prices would decrease by 10-30 percent. 

Tran Thuy

Vietnam to change tax, customs policy to encourage automobile industry

Vietnam to change tax, customs policy to encourage automobile industry

Developing an automobile industry is a part of the strategy to turn Vietnam into a modern and industrialized country by 2030. More preferences for the industry will be offered in the time to come.

Gov’t support aids automobile industry

Gov’t support aids automobile industry

The domestic automobile industry was forecast to thrive, given the Government’s supports in tax policies for imported automobile components coupled with the increasing income of citizens.

 
 

Other News

.
Vietnam retail market records $172 billion in 2020
Vietnam retail market records $172 billion in 2020
BUSINESSicon  05/01/2021 

Such growth rate, while remaining lower compared to the 12.7% recorded the previous year, was an encouraging sign for the business community amid global retail market suffering plunge in revenue during the pandemic.

Vietnam sets high GDP target in 2021 to make breakthroughs
Vietnam sets high GDP target in 2021 to make breakthroughs
BUSINESSicon  05/01/2021 

Pressure from high GDP target in 2021 is expected to help the Vietnamese government to create breakthroughs for growth in subsequent years.

Vietnam’s strong economic recovery to further take Vn-Index to nearly 1,300 in 2021
Vietnam’s strong economic recovery to further take Vn-Index to nearly 1,300 in 2021
BUSINESSicon  05/01/2021 

The fact that interest rates are still very low, will help the local stock markets continue to be an attractive and profitable channel, thereby attracting domestic investor.

Covid-19 costs Vietnam US$19 billion in export revenue
Covid-19 costs Vietnam US$19 billion in export revenue
BUSINESSicon  05/01/2021 

Vietnam could have earned US$300 billion from exports this year but the export revenue stood at just US$281 billion due to Covid-19, said Minister of Industry and Trade Tran Tuan Anh.

Banks report satisfactory business results for 2020
Banks report satisfactory business results for 2020
BUSINESSicon  05/01/2021 

Improving corporate governance and listing shares on the bourse were the major activities of banks in 2020. Digital transformation was also accelerated.

Aviation sector: trying to survive the storm of 2020
Aviation sector: trying to survive the storm of 2020
FEATUREicon  05/01/2021 

2020 was a disastrous year for the aviation and tourism industries, which were hit hard by the Covid-19 pandemic.

Rooftop solar power saw tremendous growth in 2020
Rooftop solar power saw tremendous growth in 2020
FEATUREicon  04/01/2021 

Over 100,000 rooftop solar power works with total capacity of 9,300 MW were connected to the national grid by December 31, 2020.

Overcoming pandemic shocks, maintaining high growth rate, Vietnam is the ‘next Asian miracle’
Overcoming pandemic shocks, maintaining high growth rate, Vietnam is the ‘next Asian miracle’
FEATUREicon  05/01/2021 

Vietnam was among the countries gaining the highest GDP growth rates in 2020, which could serve as a launching pad for further growth.

First trading session of Vietnamese stock market in 2021 opens
First trading session of Vietnamese stock market in 2021 opens
BUSINESSicon  04/01/2021 

The first trading session of Vietnam’s stock market in 2021 opened on January 4, with a gong-beating ceremony held by the State Securities Commission and the Hanoi Stock Exchange (HNX).

Evaluating and estimating state budget to reduce deficit and increase efficiency
Evaluating and estimating state budget to reduce deficit and increase efficiency
BUSINESSicon  05/01/2021 

According to Minister of Finance Dinh Tien Dung’s latest report delivered recently at the National Assembly (NA), Vietnam achieved most of its financial goals in the last four years, including for 2020.

Restoring confidence after a challenging year
Restoring confidence after a challenging year
BUSINESSicon  05/01/2021 

The confidence of European business leaders in Vietnam is returning thanks to the government’s response to COVID-19 during 2020, with the focus on embracing the opportunities in a new normal. 

Building on economic resilience for the future
Building on economic resilience for the future
BUSINESSicon  04/01/2021 

Since the beginning of its reform in the late 1980s, Vietnam has achieved extraordinary results in its economic development.

Impressive growth seen across real estate
Impressive growth seen across real estate
BUSINESSicon  05/01/2021 

While the pandemic has affected nearly every business, Vietnam’s real estate sector has seen significant movements throughout the year. 

Power firms seek foreign funding as loans become expensive, hard to get
Power firms seek foreign funding as loans become expensive, hard to get
BUSINESSicon  04/01/2021 

The quickest and most effective way to raise funding for power projects is to enter into an alliance with foreign investors, Nguyen Anh Tuan, general director of Phu Yen TTP Joint Stock Company, said.

Aviation industry forecast to face a hard year in 2021
Aviation industry forecast to face a hard year in 2021
BUSINESSicon  04/01/2021 

Despite a recovery in the final months of this year, the aviation industry is forecast to face further difficulties in 2021.

Vietnam’s 2020 retail sales see the lowest growth in nine years
Vietnam’s 2020 retail sales see the lowest growth in nine years
BUSINESSicon  04/01/2021 

Vietnam’s total revenue from retail trade and services reached over VND5 quadrillion (US$219.5 billion) in 2020, representing a modest yearly rise of 2.6 per cent, according to the General Statistics Office (GSO).

2020 not a good year for bank stock debuts
2020 not a good year for bank stock debuts
BUSINESSicon  04/01/2021 

Debuting on a new bourse may give a boost to the stock price, but the market reactions were not quite positive for the banks doing so in 2020.

Experts hope for brighter market outlook after remarkable year
Experts hope for brighter market outlook after remarkable year
BUSINESSicon  04/01/2021 

Analysts from securities companies are optimistic about stock market movement during the first trading week of this year and betting the positive trend will continue.

VIETNAM BUSINESS NEWS JANUARY 5
VIETNAM BUSINESS NEWS JANUARY 5
BUSINESSicon  05/01/2021 

Business closure hits record high amid pandemic

HCM City’s EPZs, IPs attract over $747.6 million in 2020
HCM City’s EPZs, IPs attract over $747.6 million in 2020
BUSINESSicon  04/01/2021 

Over $747.6 million were poured into export processing zones (EPZs) and industrial parks (IPs) in Ho Chi Minh City in 2020, representing a year-on-year increase of 15.79 percent.

 
 
 
Leave your comment on an article

OR QUICK LOGIN