The Ministry of Finance has proposed to extend the deadline for domestic automobile manufacturing and assembly companies to pay excise duty until November 20 this year.

VinFast's car manufacturing plant. Photo: Pham Hung/The Hanoi Times

This information was included in a draft proposal for a decree extending the deadline for payment of excise duty on domestically produced or assembled automobiles, which the Ministry of Finance has recently submitted to the Ministry of Justice for review.

Specifically, the ministry suggests postponing the deadline for paying excise duty for the tax periods of June, July, August, and September 2024 to no later than November 20 this year.

In the first three months of this year, the average monthly consumption of domestically produced and assembled cars was 14,160 units. The estimated monthly excise duty to be collected in the following months is around VND2.14 trillion (US$84 million). Accordingly, the total amount of tax to be extended for the four tax periods as proposed above is approximately VND8.56 trillion ($336 million).

The Ministry of Finance predicts that in 2024, the automobile market and the economy as a whole will be negatively affected by negative impacts due to economic crises and political conflicts. Business activities, especially automobile production and assembly, will encounter economic downturns, leading to decreased sales volumes and the need for many companies to reduce production.

"Relying solely on the resources and separate demand-stimulating solutions of each enterprise will not be sufficient to maintain production volumes and sales and create momentum for sustainable and steady market growth," the proposal states.

Therefore, authorities believe that it is necessary to continue to support domestic automobile manufacturing and assembly companies is essential.

"This is an urgent solution that needs to be issued immediately," assessed the Ministry of Finance, adding that the deadline for paying the tax is no later than November 20, so this policy will not affect the state budget's revenue projections for this year.

If approved by the Government, this will be the fifth time since 2020 that the excise tax on domestically produced and assembled automobiles has been deferred. Last year, this policy was also implemented to support domestic enterprises, with nearly VND8.1 trillion ($318 million) in tax deferrals. In the first three months of this year alone, the amount of excise tax deferred was almost VND5.2 trillion ($204 million).