Vietnamese Government plans to halve registration fees for domestically produced and assembled cars, effective from July 1 until the end of 2023.
In a recent governmental instruction, Prime Minister Pham Minh Chinh required the Ministry of Finance (MoF) to draft a decree to cut registration fees by 50%, which will be evaluated by the Ministry of Justice.
The decree will be submitted to the Government before June 15.
|Customers at a car showroom in Hanoi. Photo: Viet Dung/The Hanoi Times|
Various associations and municipalities proposed the Government extend the excise tax and reduce registration fees for domestically produced and assembled cars by 50% in early March this year. The aim was to stimulate demand.
In response, import companies expressed their desire for the Government to apply the same policy to imported cars for fair competition.
According to a report by the Vietnam Automobile Manufacturers' Association (VAMA), the total car sales in the market dropped significantly by 30% during the four-month period to 92,801 units. Dealers have consistently offered promotions to boost purchase demand, but the impact has not been as desired.
According to the Ministry of Finance, a 50% reduction in fees for domestically produced cars could lead to an increase in sales volume and, consequently, an increase in VAT and excise tax revenues. But the main collectors of these taxes are eight specific localities where manufacturing and assembly companies are located, including Vinh Phuc, Hai Duong, Haiphong, Ninh Binh, Danang, Quang Nam, Binh Duong, and Ho Chi Minh City.
The Ministry of Finance also noted that the policy could affect Vietnam's compliance with international commitments. It has already received numerous requests for clarification on the policy due to the difference in its application between domestically manufactured and assembled cars and imported cars.
Previously, the Government applied the same reduction policy for domestically assembled cars in 2021 - 2022 as a measure to support the recovery of industrial enterprises affected by the Covid-19 pandemic.