State revenue from registration fees increases

The registration fees collected for the state budget increased from VND11,816 billion in 2012 to VND40,194 billion in 2019, up by 240% or VND28,378 billion.

State revenue from registration fees increases

Revenue from registration fees has increased steadily in recent years, with an average annual growth rate of about 16%, except for 2020 due to the policy of reducing registration fees for domestically produced cars.

According to the provisions of the Law on State Budget, local budgets can keep revenue from registration fees. Therefore, this is a revenue source that plays an important role in total local budget revenue.

According to the Ministry of Finance, the current registration fee has contributed to strengthening the state management of assets, and protecting the legitimate interests of those with the right to own and use assets.

Revenue from registration fees has increased steadily in recent years, with an average annual growth rate of about 16%, except for 2020 due to the policy of reducing registration fees for domestically produced cars.

The registration fees collected for the state budget increased from VND11,816 billion in 2012 to VND40,194 billion in 2019, an increase of 240% or VND28,378 billion.

Registration fee collection in the period of 2012 - 2020 is about VND24,740 billion per year on average, accounting for about 2.1% of total state budget revenue, 2.9% of total domestic revenue and 4.8% of total local budget revenue.

The structure of registration fee collection by asset groups has also increased steadily over the years, especially revenue from registration fees for cars, which accounted for about 73% of the total registration fee revenue for the period 2017-2020.

Registration fee revenue from houses and land accounted for the second largest proportion with stable growth over the years, from VND1,454 billion in 2012 to VND5,838 billion in 2019, a 4-fold increase.

After more than a year implementing online registration fee collection (from March 12, 2020 to June 28, 2021), in Hanoi and Ho Chi Minh City, the number of online registration fee payment transactions for cars and motorbikes was 23,124 vehicles, totaling nearly 623.3 billion VND.

For the remaining 61 provinces and cities, after nearly 11 months of implementation (from August 1, 2020 to June 28, 2021), the number of transactions to pay registration fees online for cars and motorbikes was 248,833 vehicles, worth over 1,651 billion VND.

 

It is estimated that online registration fee declaration and payment procedures for cars and motorbikes helps reduce taxpayer’s compliance costs by about VND1,020 billion/year.

The Ministry of Finance is collecting opinions on a draft decree amending and supplementing a number of articles of Decree 140 of the Government on registration fees.

The Ministry has proposed that the registration fee for electric cars for the first time should be equivalent to 50% of that for petrol-fueled and diesel-fueled cars with the same number of seats. The second registration fee will be equal to that for petrol and diesel cars with the same number of seats, at 2%.

Currently, the registration fee for passenger cars with nine seats or less in Ho Chi Minh City and Hanoi is 15%, and 10% for the remaining provinces and cities. In its submission to the Government, the Ministry of Finance proposed that the first registration fee for electric cars should be 5-7.5%. At this tax rate, the registration fee for a car worth 600 million VND is about 30-45 million VND.

With a factory with a yearly capacity of 250,000 vehicles, the selling price of VND 690 million/vehicle, assuming all these vehicles sell out, revenue from registration fee (5%) would be VND 5,175 billion.

According to the Vietnam Automobile Manufacturers’ Association (VAMA), the number of electric vehicles registered in 2020 was only about 1,000 units, accounting for about 0.16% of the total number of registered cars.

The Ministry of Finance also wants to add submarines and submersibles to the subjects paying registration fee, at the rate of 1%.

Luong Bang

Production shoring up state coffers

Production shoring up state coffers

Although the state budget revenue was dented in May due to the resurgence of COVID-19 affecting businesses’ performances, the first five months of the year have seen a big surplus in the state coffers, 

Finance Ministry proposes 50% cut in registration fee for electric cars

Finance Ministry proposes 50% cut in registration fee for electric cars

The Ministry of Finance is collecting opinions on a draft decree amending and supplementing a number of articles of Decree 140 of the Government on registration fees.

 
 

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