The import tariff applied to car sales in 2010 has been prepared by the Ministry of Finance (MoF) and will be in effect from January 1, 2010.
The new tax regulations are expected to be issued this month so that aguidelinefor it can be releasedbefore its launch. Three different tariff rates will be imposed on all passenger cars. Special vehicles, large cubic centimetres vehicles and four-wheel drive vehicles will enjoy an 80 percent tax. Smaller vehicles that are less-often imported arecharged at above 83 per cent. The rest will retain the current 83 per cent tax.
There is hope that the new imported car tariff will ease consumers’ doubt on the transparency of the policy, thus reducing price pressure within the domestic car market due to rumours that imported car tariff would possibly increase into 91 per cent.
Vu Van Truong, director of MoF’s Tax Policy Department, said that according to the tax commitment for 2010, the maximum tax rate of 86 per cent will only be imposed on some categories of specific vehicles while most other vehicles will still enjoy the 83 percent tariff.
The Ministry of Industry and Trade (MoIT) previously proposed all imported car taxes to be increased to 91 per cent.
Truong said that the MoIT’s proposal has some ground, as a few types of vehicles have been committed to this tax rate.
However, to operate policies efficiently and avoid obscure information having negative effects on the market, the MoF has proposed to set only one standard import tariff of 83 per cent. Only those vehicles that can not be settled on this common rate will be imposed according to their commitment, but none should reach 91 per cent.
The MoF explained to the government that a single common tax rate would simplify processes and boost transparency. So, instead of different tax rates of 83, 86, 87 and 91 percent, all passenger cars should be taxed at 83 per cent. This model has applied from 2009 and will remain stable in 2010 to avoid the controversy between enterprises and the customs about taxation, which already happened recently.
"The new tax regulation will take effect from January 1, 2010. We are completing the final steps for it to be issued by the middle of November,” Truong said.
