Dao Phan Long, deputy chair of VAMI (Vietnam Association of Mechanical Industry), said he had received a lot of complaints from member companies about unhealthy competition from importers of Chinese vehicles, who set prices lower than the real value to evade tax.

Ben Chassis Howo 8X4, for example, with customs declarations made from April 17 to June 28, had the declared price of $21,865, or VND480 million. 

The real price of the vehicle is $40,900, or VND900 million. As such, the gap between the declared and the real price was VND400 million.

According to VAMI, with such a low declared price, the state will fail to collect $4,759 from every car imported into Vietnam, or VND104 million.

About 40,000 products, mostly trucks, were imported from China in 2015 with import turnover of $1 billion. The state failed to collect VND4 trillion just within one year.

Vietnamese enterprises are complaining that they cannot compete with cheap Chinese car imports that evade taxes.

Do Phuoc Tong, chair of Duy Khanh Mechanical Engineering, pointed out that wrong declarations by importers has led to loss in import tax and VAT collection.

“As importers declare low selling price which cause losses, they will not have to pay corporate income tax,” he explained. 

Meanwhile, the representative of an automobile manufacturer in Vietnam, said the tax evasion would force domestic manufacturers to shut down because their products could not compete with imports which can be sold at low prices thanks to tax evasion.

“Once manufacturers have to scale down production, the orders for car parts and accessories will also decrease, thus affecting mechanical engineering enterprises,” he explained.

Long said VAMI has proposed to the Ministry of Finance to tighten control over customs declarations to be made by car importers, emphasizing that this was a necessary thing to ensure healthy competition among players in the market.

Nguyen Viet Dung, a car dealer in HCM City, said that Chinese cars can sell well in Vietnam because they are cheap thanks to the tax evasion.

Chinese Dongfeng, Sinotruk, FAW, JAC and Chenglong products, for example, are sold at 2/3 of the prices of products from South Korea and Japan.

He also pointed out that the import tariff on Chinese CBU (complete built unit) imports is below 15 percent, while import car parts bear tax rates of 15-25 percent.


PLO