Vietnam is among the countries with the highest selling price of cars in the world.
There are also many kinds of official taxes and fees on cars. These include the car part import tax for domestically assembled cars (assemblers pay this tax and take it into consideration when setting selling prices), import tax (paid by importers) of 50-150 percent, luxury tax at 40-60 percent, VAT of 10 percent and corporate income tax of 22 percent.
Currently, the imports from ASEAN, including Thailand and Indonesia, don’t bear import tax any more as per Vietnam commitments in FTAs. Meanwhile, the imports from non-ASEAN sources, including Europe, the US, India and Japan, still bear the tax.
To put cars into circulation, car owners will have to pay about 10 kinds of fees. These include the ownership registration fee (10-15 percent), number plate granting fee, vehicle registration fee (VND240,000-560,000), technical safety assurance certification fee (VND50,000-100,000), emission testing fee, fuel consumption testing fee, energy labeling certification fee and others.
As for road maintenance fees, car owners have to pay twice, when they register as owners of the vehicles and when going through BOT fee collection stations.
The car prices in Vietnam are among the highest in the world because of too many kinds of taxes and fees. It is estimated that the taxes and fees make up over 50 percent of the total prices.
Though the tariff on imports from ASEAN has been cut to zero percent, the selling prices still have not decreased as expected by consumers.
Car owners have been warned that they may bear another kind of tax – asset tax. The Ministry of Finance has proposed a tax of 0.3 percent or 0.4 percent on cars valued at VND1.5 billion or more.
An analyst said if the tax takes effect, it will mostly affect luxury car imports, most of which have value of over VND1.5 billion.
Decree 116, with its strict regulations, restricts car imports. And the number of car imports will decrease further if the tax is applied.
Luxury imports are mostly from Japan, the US and Germany, which are taxed 40-150 percent, depending on cylinder capacity.
Nguyen Xuan Thuy from the Ministry of Industry and Trade confirmed that some car models are 60-80 percent more expensive than in Indonesia and Thailand.
In 2017, a total of 272,750 cars were sold, according to the Vietnam Automobile Manufacturers’ Association (VAMA).
Source: VNN
