Illustrative image (Source: VNA) A number of types of automobiles will see prices drop by up to 42 percent by 2019 as a result of lower import and special consumption taxes, said Pham Dinh Thi, Head of the Tax Policy Department in the Ministry of Finance.
The official revealed the information at a press briefing on the draft Law on Amendments and Supplements to several articles of the Law on Value-Added Tax, the Special Consumption Tax and the Law on Tax Administration in Hanoi on October 20.
He said taxes imposed on cars with less than nine seats and a cylinder capacity of below 1,000 cubic metres will drop between 15 and 25 percent.
Thi also stressed the need to adjust the special consumption tax levied on autos which are environmentally-friendly and have small cylinders to a level equal to that of other Southeast Asian nations, thus boosting the country’s auto industry.
He explained that the ASEAN Trade in Goods Agreement and a handful of bilateral agreements will reduce import taxes on cars as well as commodities subjected to the special consumption tax to zero percent.
Vietnam has limited time to abolish auto import taxes in 2018 as committed, the official noted.
According to him, taxes on vehicles with less than nine seats and a cylinder capacity of below 2,000 cubic metres in many regional countries hovers at only 15-30 percent.
Vietnam’s special consumption tax is higher than the average of other ASEAN nations like Indonesia, Thailand, Singapore and Malaysia, Thi said.
Responding to concerns whether tax reductions would affect State budget collections, he said Vietnam’s announcement of the special tax consumption contraction roadmap is bound to lure more investors.
The increase in market size and advanced support industry could add much more to the State budget than the current taxes, Thi said.-VNA
