The Thaco Mazda factory of Truong Hai Auto Group in the central province of Quang Nam (Photo: VNA) Hanoi (VNA) - The Ministry of Finance plans to eliminate import taxeson auto materials and parts in order to support the development of thecountry’s automobile industry.
The tax cut was included in the Government’s revised decree on the schedule forpreferential import tariffs, flat taxes, compound tariffs and out-of-quotaimport tariffs.
The Ministry of Finance said it will develop preferential tax policies for rawmaterials and auto parts for automobile manufacturing and assembly from nowuntil 2023.
This decree is expected to remove bottlenecks in the development of prioritisedindustries, including the automobile industry, and promote the strengths ofpart suppliers to increase the localisation rate (the percentage of parts thatare produced locally).
Under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership(CPTPP), which came into force on December 30, 2018, the import duties oncompletely built-up cars (CBUs) from CPTPP member countries will gradually fallfrom 70 percent to zero over the next seven to nine years.
The European Union-Vietnam Free Trade Agreement (EVFTA), which was signed on June 30this year, includes a similar commitment. It stipulates that the import tax onCBUs from EU countries will gradually decrease to zero percent after nine to 10years.
The import duty was eliminated for cars from ASEAN countries last year. By2030, the Vietnamese automobile market will be fully open to major automobileproduction centres around the world including Japan, Mexico and the EU.
The ministry said Vietnam’s part suppliers are mainly small- and medium-sizedenterprises with low production capacity. Among about 1,800 spare partbusinesses, only about 300 are participating in the production networks ofmultinational corporations.-VNA
VNA
