Viet Kieu set for tax hikes
Viet Kieu set for tax hikes
The Ministry of Finance has proposed raising special consumption taxes on vehicles imported by repatriating Vietnamese citizens (Viet Kieu).
In a submission to the government, the ministry proposed raising the special consumption tax on Viet Kieu vehicles to similar rates applied to cars imported for domestic purchase.
According to current regulations, Viet Kieu vehicles are taxed at a rate of 50 per cent of the purchase price, while cars imported for domestic purchase attract a VAT, import tax and special consumption tax equivalent to over 100 per cent.
Under the current system, an imported car worth US$80,000 will cost a domestic consumer up to $200,000 after the three taxes have been applied, while the same vehicle imported by a Viet Kieu will cost around $120,000 after tax. The ministry's proposal will see the cost raised to $160,000.
The move is expected to prevent exploitation of the Government's preferential tax policies for illegal profits.
Last year, there was a sharp rise in the number of high-end vehicles brought in by Vietnamese citizens. It's reported that more than 1,000 luxury cars had been imported as assets of Viet Kieu in 2012, including top brands such as Lexus, BMW, Mercedes Benz, Land Rover, Rolls Royce, Bentley and Ferrari.
Government agencies have found a number of Vietnamese people living in foreign countries had brought vehicles to Viet Nam as ‘assets', after migrating for short periods; often between one or two years.
The ministry expects the higher tax will limit the number of vehicles imported by Viet Kieu, but acknowledges the continuing disparity in the taxes may still entice people wanting to profit illegally.
vietnamnews
