Vietnam to Stop Tax Incentive for Car Purchases Next Year
Vietnam will stop ownership registration fee and tax reduction for cars and auto components next year, state media reported, citing a resolution issued by the Government at a meeting Nov 11.
The registration fees collected from car purchasers in Hanoi and HCM City will be adjusted to 12%, instead of the current 6%, early 2010. In other cities, the applied registration fees would be 10%, instead of 5%.
Meanwhile, the value added tax on cars and auto components will also return to the previous level of 10% from current 5%.
In early Nov, Vietnam Automobile Manufacturer Association (VAMA) proposed the Ministry of Finance and other ministries consider extending tax incentives until late 2010 to help develop domestic auto market.
The removal of tax incentives may lead to a sharp fall in car sales, the association blamed for its proposal.
Local automobile makers sold 92,136 cars between January and October, down 5% from a year earlier despite a sharp rise of 103% last month, VAMA statistics showed. (chinhphu.vn)
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