Extended payable excise tax will help boost domestic automobiles
Extended payable excise tax will help boost domestic automobiles
The Ministry of Finance (MoF) proposal to extend the deadline for excise tax payment for locally manufactured and assemble cars will help businesses get more financial resources and restore their production, according to Dinh Trong Thinh a senior lecturer at the Finance Institute.
The Government Decree No 32/2022/ND-CP, dated May 21, 2022, extends the deadline for payment of excise tax on domestically produced and assembled cars.
According to industry insiders, the locally-made and assembled auto industries have suffered from the pandemic and require support from the Government.
Thinh said that the deadline extension will last until this year. In the long run, it is necessary to extend the deadline further. In addition, the Finance Ministry also needs to implement Decree No 32’s regulations soon effectively.
Minister of Finance Ho Duc Phoc said the ministry always listens to business opinions to continue advising the Government. The Government and the National Assembly will conduct more realistic and effective policies to remove obstacles and help companies develop sustainably.
The decree takes effect from the date of issuance until late December 31, 2022. Once the extended deadline expires, excise tax payment on domestic cars shall revert to normal.
This is the third extension of excise tax compliance due date for local automobiles since 2020, with an amount equivalent to a tax break of VND20 trillion (US$863 million).
The move is part of the Government’s Decree No 32. The time limit for paying the payable excise tax arising in June to September is no later than November 20, 2022.
Previously, the Finance Ministry made a 50 per cent cut in the registration fee for locally-produced vehicles. Such support, along with this latest policy, is considered an urgent solution for the local car industry to recover from the severe impact of the pandemic.
According to the Finance Ministry, turnover from an excise tax on domestically-manufactured vehicles is estimated at VND2.45-2.8 trillion ($107-122 million) per month. Assuming growing demand for electric vehicles, the ministry expects a decline of VND2-3 trillion ($87-130 million) in State budget revenue or a drop of VND170-250 billion per month.
According to the ministry, businesses eligible for a delay in excise tax payment deadline can either send the request directly online or print copies to the tax authorities.
The total excise tax amount subject to relief in October and November of 2021 stood at VND5.44 trillion ($237 million).
