Import taxes on used cars of nine seats or fewer and an engine displacement of less than 1,500cc will increase by up to 20 percent from April 28.

The Ministry of Finance’s Circular 28/2013/TT-BTC states that the import tax imposed on used cars with engine displacement of less than 1,000cc will be 4,200 USD per unit instead of the current 3,500 USD.

The tax for each used car with a cylinder capacity of between 1,000-1,500cc will become 9,600 USD, a rise of 1,600 USD.

The adjustment will narrow the gap between import tax on used cars and brand new cars, especially in the compact car division.

Deputy Prime Minister Hoang Trung Hai last month asked the Ministry of Finance to review the import tax on used cars in a bid to restrain importers from disguising brand new vehicles as old ones to avoid higher tax rates.

It followed a proposal from local automaker Thaco Group, who reported that companies were fraudulently importing cars with small engines in order to be charged in the lowest tax bracket.

According to recent regulations, in order to be defined as second-hand, used cars must have been registered in a foreign country for at least six months before being exported to Vietnam and they must have a minimum mile age of 10,000 km.

Thaco claimed that many imported disguised brand new cars as used ones by adjusting the mileage counters to over 10,000 km and changing import documentation, allowing them to avoid the 70 percent tax imposed on new cars.

According to the General Department of Statistics, the country imported 3,000 cars in January and just 1,000 cars in February.

It imported 27,000 cars in 2012, down 50 percent year on year.-VNA