Ministry to oversee tax on used car imports
Ministry to oversee tax on used car imports
Deputy Prime Minister Hoang Trung Hai has asked the Ministry of Finance to review the import tax of used cars in a bid to restrain importers from disguising brand new vehicles as old ones to avoid higher tax rates.
The move follows a proposal from local automaker Thaco Group, who have reported that companies are fraudulently importing cars with engines smaller than 1,000cc.
The import tax imposed on used cars that have this type of engine is US$3,500, the lowest range of tax.
According to recent regulations, used cars must have been registered in a foreign country for at least six months before being exported to Viet Nam and must have a minimum mileage of 10,000 km to be defined as second-hand.
Thaco CEO Tran Ba Duong claimed the company had discovered that many importers had falsified brand new cars as used ones by adjusting the mileage counters to over 10,000 km and changing import documentation. He said that this fraud allows them to pay the low import tax per vehicle rather than the 70 per cent tax imposed on new cars.
Meanwhile, Duong said Kia Morning cars assembled by Thaco in Viet Nam bear a special $4,500 consumption tax plus $2,500 of import tax for parts and accessories.
“That means fraud is resulting in unfair competition between imported cars and locally assembled cars, especially of the brand that we are assembling,” he claimed.
Duong said that as many as 700 used Kia Morning cars were imported to Viet Nam last month, a considerable increase from previous months.
However, according to the General Department of Statistics, the country imported 3,000 cars in January and was estimated to have imported just 1,000 cars this month.
It imported 27,000 cars in 2012, down 50 per cent year on year.
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