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MOIT asks for delay of luxury tax collection on cars
The Ministry of Industry and Trade (MOIT) has sent a dispatch to the government, asking it to temporarily halt the increase of the ownership registration tax, luxury tax and value added tax on vehicles of all kinds in order to help ease difficulties on the automobile industry.
In the dispatch sent to the government on January 5, MOIT said that by the end of September 2008, some 110,000 cars had been sold, which made automobile manufacturers believe that they would be able to sell some 130,000 cars in 2008.
However, sales have been poor since the end of August. The policy on tightening credit installed by commercial banks and the global economic recession led sales to decrease by half in the last four months of the year. As a result, many manufacturers have had to halt production. Some members of the Vietnam Automobile Manufacturers’ Association have laid off 20-30% of their workers.
The world’s automobile industry has also been falling into serious difficulties. Toyota has for the first time announced a loss, China has reported big stocks of millions of cars, while three big US automobile manufacturers are on the verge of bankruptcy. The governments of all countries which have automobile industries are taking strong measures to rescue their automobile industries.
MOIT has, therefore, asked the government to consider delaying the luxury and VAT tax increases for all kinds of vehicles. If it is unable to delay the application on all kinds of vehicles, it asked that the delay still be applied for trucks and buses, as these are vehicles serving production and services, and they are the main subjects of the automobile industry programming.
As for cars with less than nine seats, the new tax rates should not be applied to ones assembled with car part sets imported prior to January 1, 2009.
Moreover, MOIT has also asked for a delay of the application of the new car ownership registration tax (which is higher than the previous one) in order to help enterprises clear big stocks of cars.
MOIT has also asked the government to call for commercial banks to lend capital to cargo and passenger transport firms, including taxi firms, to help them purchase vehicles. It has asked the government to consider setting up policies on giving support in interest rates to bus and truck manufacturers and assemblers.
Prior to that, the Vietnam Automobile Manufacturers’ Association (VAMA) sent a petition to the Ministries of Finance, and Industry and Trade, asking them to delay the implementation of VAT and luxury tax laws and the application of the new car ownership registration tax.
VNE
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