Under the itinerary, the import tax on completely built-up units from ASEAN will be zero percent by 2018, so that the number of cars from this region to Vietnam will significantly increase. (Source: VNA)

Hanoi (VNA) - Import tax on auto spare parts and components may be down to zero percent next year, two years before schedule in 2018, under the ASEAN Free Trade Agreement (FTA).

This is a key part of the finance ministry's proposal being sent to relevant ministries and sectors to get their opinion with regard to the reduction of import tax on spare parts and components for many models of cars. It aims to support the development of the domestic automobile industry.

Under the itinerary, the import tax on completely built-up units from ASEAN will be zero percent by 2018, so that the number of cars from this region to Vietnam will significantly increase.

As for vehicles with engine displacement of 2,000cc and below, the finance ministry proposed to reduce tax on seven parts of the engine group and other components such as gear-box, car cigarette lighter, auto wheel and rim.

In concrete terms, the import tax on auto engines from the Republic of Korea, which is not an ASEAN member, will be reduced from 20 percent to 3 percent in 2016 – equal to the level that Vietnam has committed in the Vietnam-Japan FTA.

Tax on gear-box, wheels and rims was proposed to be decreased to 5 percent, while car cigarette lighters were to be zero percent by next year.

As for trucks, the ministry proposed to cut import tax on the gear-box and its accessories from the Republic of Korea and Japan by zero percent by 2016 – equal to that committed to ASEAN members – replacing the set plan of 2018 and 2019.

Meanwhile, import tax for auto parts from China will be zero percent by 2018.

The ministry said that the cut on import tax on a number of auto space parts and components would not much affect the State budget because the money collection was expected to increase from the development of the domestic auto assembling and production industry.

This proposal is one of many by the Ministry of Finance to support the domestic automobile industry. Earlier, the ministry proposed to adjust the calculation of special consumption tax on imported cars.

In addition, tariffs on cars with an engine displacement of below 3,000cc would be removed in the 13th year after the Trans-Pacific Partnership (TPP) agreement comes into effect. Meanwhile, tariffs on cars with displacement of 3,000cc and above would be lifted in the 10th year.-VNA