Vietnam May Lower Luxury Tax on Automobiles
The Vietnamese Ministry of Finance is considering reducing luxury tax rates on locally made and imported automobiles, a step to fulfill tax commitments of WTO admission.
Currently, the luxury tax rate or special consumption tax is 50 per cent on sedans, 30 per cent on 6-15 seat cars and 15 per cent on 16-24-seat cars.
A ministry official said carmakers complain about high vehicle tax in the country and ask for lower rates.
He said the tax cut, if possible, will be enacted gradually in order to avoid a vehicle boom in the country, especially in urban areas.
“This would cause a lot of problems, especially as transport infrastructure is very poor in Vietnam,” he explained.
However, the official declined to reveal the concrete roadmap for tax reduction.
The ministry may change the method of calculating taxes, from passenger number to engine capacity, he said. “The way of calculating tax based on the number of seats might enable fraud in tax declarations, and is not in line with international practice.”
According to the General Statistics Office, Vietnam was forecast to produce nearly 13,800 cars in the first four months this year, up 40.6 per cent, and to import 3,000 units in the period, down 25 per cent.
Vietnam began imposing the luxury tax on cars in 1996. (VnExpress)
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