Domestic manufacturers of buses, vans and trucks have called on the Vietnamese government to delay hiking tax as their sales sharply dropped due to the global economic slowdown, the VnExpress newspaper reported.
The VAT on automobiles will be doubled to 10 per cent when the new regime takes effect in 2009 but automakers want the government to delay the introduction of the new tax until July.
Tran Ba Duong, chief executive officer of Truong Hai Auto, said domestic consumption has been hurt by the global economic woes as well as the central bank’s tight monetary policy earlier this year.
Banks raised loan interest rates to as high as 21 per cent after the State Bank of Vietnam lifted official interest rates to try to rein in double-digit inflation.
The government has also increased vehicle registration fees in efforts to curb the widening trade deficit and traffic chaos in major centers.
As a result, about 5,100 locally-assembled vehicles were sold last month, a decline of nearly 50 per cent year-on-year, according to the Vietnam Automobile Manufacturers Association (VAMA).
Car makers have recently launched promotional campaigns to boost sales in the year-end shopping season but the situation has not improved, the online paper quoted Duong as saying.
Regarding automobile registration fees, VAMA Chairman Udo F. Loersch said that decisions by major cities to increase the fees to curb traffic jams would not work as car buyers could get around the higher fees by registering their vehicles in other provinces.
VAMA members said authorities should use other measures including separating streets at traffic jam-prone areas into flexible lanes by using traffic lights and lane separators, as well as increasing police presence during rush hours.
The finance ministry has encouraged Ho Chi Minh City and Hanoi to raise the fees from the current 10 per cent of the selling price. Hanoi last week decided to raise the fee to 12 per cent. (VnExpress)
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