Toyota to fight with VN customs agency on minimum taxable prices
Toyota to fight with VN customs agency on minimum taxable prices
Toyota Vietnam complains that it loses thousands of dollars worth of profits from the imported two luxurious models Lexus RX 350 and ES 350 because of the unreasonable mechanism on taxable price determination.
The unprofitable import deals
The argument between the automobile manufacturers and Vietnamese customs has been lasting for four months.
Toyota Vietnam has, for the seventh time, lodged a petition to the General Department of Customs (GDC), complaining that it is meeting big difficulties with the trade of Lexus RX 350s and ES 350s imported from Japan
With the selling prices of $138,000 for RX 350 and $121,000 for ES 350, Toyota expected the profit equal to 10 percent of the retail prices, the figure that it believes “very modest.”
However, the estimated profit turns out to be unreachable for Toyota Vietnam, because of the high tax sums it has to pay for the imports.
Lexus RX 350, according to the automobile manufacturer, has the real cost price at $40,020.88, but the taxable price determined by the HCM City customs was $41,580, or $1,559.12 higher than the actual value.
Meanwhile, the Hai Phong City Customs imposed the taxable price at $41,000, or $979.12 higher than the actual value.
As a result, Toyota Vietnam has been requested to pay the tax sums higher than the initially estimated.
The same problem has occurred with 16-seat Toyota Hiace Commuter model. The HCM City Customs set the taxable price at $27,000, while the actual price at which Toyota Vietnam imported was $21,943 only.
As a result, the import cost has increased from the estimated $90,315 to $103,987 for Lexus ES 350 and from $105.431 to $107.963 for Lexus RX 350. This means that Toyota Vietnam loses the profits of $13,672 and $2,532 for every ES 350 and RX 350 sold, respectively.
Especially, Toyota Vietnam affirmed that it incurs the loss of $1,278 for every ES 350 because the import cost is even higher than the wholesale price, and that it has stopped importing the products.
Analysts, noting that there is a big difference of up to $30,000 in the cost prices and the retail prices, keep doubtful if Toyota incurs losses or meets difficulties as it complains.
Unreasonable taxable price determination mechanism?
The analysts also commented that this is a strong blow dealt on Toyota, the big guy from Japan which always gives advice to the Vietnamese policy makers on the issues relating to the automobile industry development strategy.
The HCM City and Hai Phong City Customs both have decided that the manufacturer’s imported consignments did not have the required conditions for the customs to accept the declared values. The importer could not show the convincing invoices and proofs.
Meanwhile, Toyota Vietnam has rejected the local customs agencies’ decisions, while requesting the General Department of Customs to inspect the case.
The automobile manufacturer affirmed that the customs agencies referred to unreliable information sources to define the taxable prices.
In May 2012, Toyota Vietnam imported a Hiace Commuter at $26,602.44. This was the specimen car made to the order by Toyota Vietnam and it had the high price. However, the Hiace Commuters imported later must be cheaper because they were made in large quantity. As such, it would be unfair if the customs imposes the same taxable price of nearly $27,000 for all the imports.
vietnamnet
