return icon Vietnamnet.vn

Gov’t regulation offers golden opportunity for local auto production

Under a new decree, used auto imports will have no way to enter Vietnam because of high tariffs and strict requirements on maintenance services, creating a golden opportunity for domestic automobile manufacturers.

VietNamNet Bridge - Under a new decree, used auto imports will have no way to enter Vietnam because of high tariffs and strict requirements on maintenance services, creating a golden opportunity for domestic automobile manufacturers.


{keywords}

MOF aims to encourage the development of automobile industry




Under the newly issued Decree 125, the import tariff on used passenger cars with less than 16 seats has been raised, while the tariff on used cars with 16 seats and more and used trucks remains unchanged. 

Passenger cars with nine and fewer seats and capacity of no more than 1000cc will bear a fixed tax rate of $10,000 per car.

The passenger cars with cylinder capacity of 1000cc and more and with 10-15 seats will bear mixed tariffs, to be calculated as follows:

MOF aims to encourage the development of the automobile industry and support industries, help the domestic automobile market grow in a stable way and maintain the domestic automobile manufacturers’ competitiveness in prices.

For 1.5L to less than 2.5L cars, the import tax will be equal to the taxable price x 150-200% (tax rate) +$10,000.

For 2.5L and bigger cars, the import tax will be equal to the taxable price x 150-200% (tax rate) + $15,000.

Analysts estimate that the new way of taxation will increase the selling price of used cars by hundreds of millions of dong. In some cases, used car prices will be even higher than brand-new cars of the same kinds because of higher tax.

According to Duy Minh, the owner of a car sales agent in HCMC said a used 1.0L car imported from South Korea now has taxable price of $5,000 and bears a fixed tax rate of $5,000. This means that the cost price of the car is $10,000.

However, with the new tax rate, the cost price would be $15,000. And counting other expenses, the selling price of the used car would be $23,000, or VND600 million.  Meanwhile, a brand-new car of the same kind is sold at VND500 million 

According to Nguyen Thi Thanh Hang, deputy director of the MOF’s (Ministry of Finance) Tax Policy, the new policy aims to ensure benefits to the state, enterprises and consumers.

MOF aims to encourage the development of the automobile industry and support industries, help the domestic automobile market grow in a stable way and maintain the domestic automobile manufacturers’ competitiveness in prices.

Prior to that, the government released Decree 116, setting up strict requirements on manufacturing, assembling, importing and maintenance services.

Analysts commented that the decrees released recently all show the government’s determination to protect domestic automobile production.

Meanwhile, Tran Ba Duong, chair of Truong Hai Automobile, said the Decree 116 aims to protect consumers rather than domestic manufacturing, especially in the context of poor transport infrastructure and high number of accidents.

“Fair treatment will be given to imports and domestically made products, i.e. imports will have to satisfy the same requirements set on domestically made products,” he explained.


RELATED NEWS

New policy encourages CBU car imports, rather than assembling

Industry Ministry admits failure in developing auto industry. So what's next?


Thanh Mai

MORE NEWS

VIETNAM NEWS HEADLINES SEPTEMBER 25

Central localities likely to be hit by typhoon Noru

AI integration the inevitable path ahead

Big Data and AI will be the optimal tools to run factories in the future and digital transition will help firms optimise costs and cut emissions.

Ministry to scrutinise VietGap certifications after fake labels found on vegetables

The Ministry of Agriculture and Rural Development is investigating reports of vegetables sold in supermarkets being marked with fake Vietnamese Good Agricultural Practices (VietGap) labels.

E-commerce sector in dire need of qualified candidates

The tight supply of qualified candidates in the labour market is a glaring issue facing e-commerce firms, according to insiders.

Unique green moss-covered homes of the Tay Con Linh mountain range

It is an ideal environment for plants to flourish and thrive, including thick green moss, which ethnic people use to cover the palm-leaf roofs of their homes.

Farmers save wild birds and the environment

Farmers in different provinces throughout Việt Nam have for years spent time and effort to save wild birds, giving them a home to nest and lay eggs.

Deputy PM highlights significance of int'l solidarity, cooperation at UN session

The strengthening of international solidarity and cooperation is key to addressing interlocking global challenges, affirmed Permanent Deputy PM Pham Binh Minh while addressing the general debate of the 77th Session of the UN General Assembly.

Huge potential for luxury real estate in Vietnam

The branded residence market is gaining a stronger foothold in the Vietnamese market with potential to further develop, shaping the lifestyle of the country’s elite, according to experts.

VIETNAM BUSINESS NEWS SEPTEMBER 25

Action plan to promote green growth in agriculture

Vietnam’s economic growth counts on high-tech FDI

Vietnam’s economic growth has been accelerating in 2022, with experts considering high-tech foreign investments as a driver.

The “seven-star” islands in Quang Ninh

Along with crystal blue sea and beaches, the 7 Sao (seven star) islands also have caves and primeval forests.

Customs you only see in Vietnam

The travel site Culture Trip has listed a number of Vietnamese customs that often surprise foreign tourists:

Investors and buyers play waiting game in credit switch

The State Bank of Vietnam finally created extra credit room for some banks on September 7. However, the extension is deemed low and may not help real estate businesses and homebuyers access feasible capital sources for their projects.

Woodwork exports to EU, US drop as consumers cut spending

Many woodwork manufacturers complain that exports have been sliding as people in target markets have been tightening their purse strings.

Vietnam: new destination for multinationals to set up R&D centers

Vietnam wants to upgrade foreign direct investment (FDI) quality by manufacturing products with higher hi-tech and added value, and multinationals are also striving to do this after many years in Vietnam.
back_to_top