New tax to be levied on auto imports
New tax to be levied on auto imports
The Government will levy a special consumption tax on cars with 24 seats and below from January 1, 2016, according to a Prime Minister's new decree.
According to details in a number of new articles of the revised law, under the decree 108/2015/ND-CP, the new special consumption tax, which will be set equal to the importers' price, will replace the current one. It has been calculated keeping in mind their cost, insurance, and freight (CIF) value plus current import tariff.
The new calculation is expected to ensure fairness between automobile importers and domestic assemblers and producers, preventing tax fraud and tax losses to the State's budget.
The tax for imported cars with 24 seats and below will be equal to the importer's price but not lower than 105 percent of the cost price, which includes the car's import price plus import tax and special consumption tax. If it is lower than this level, the tax will be fixed by a tax agency following regulations on tax management.
As for the 24-seater cars assembled and manufactured in Vietnam, the tax will be equal to the carmakers' wholesale price but this price will not be lower than 7 percent compared with the average prices of automobile businesses.
According to the General Statistics Office, Vietnam imported an estimated 95,000 cars in the first 10 months of this year at a cost of 2.31 billion USD – making year-on-year increases of 82.8 percent and 100.2 percent, respectively.
As is normal, people's demand of cars will increase in the last few months of the year. Therefore, the businesses are expecting to import reach more than 100,000 cars by the end of this year with the total price exceeding 2.5 billion USD.
Meanwhile, the total import turnover of auto spare parts reached 4.8 billion USD in the 10 months, 64.4 percent higher than the same period last year.
Imported automobiles is expected to add to the boom in the domestic market in the near future as Vietnam will reduce its car-import tax to zero per cent by 2018, under the ASEAN Trade in Goods Agreement.
