Automobile market ‘holding its breath’ after new tax

Right after the prime minister decided to slash some kinds of taxes and fees in order to stimulate consumption and investment, including the car ownership registration tax, sales on the car market immediately slowed down.

As the decision will be in effect from May 1 until December 31, 2009, buyers have cancelled their purchase plans and will only make purchases after May.

Under the new decision, the car ownership registration tax rates on cars with less than 10 seats will decrease by 50% from 10-12% to 5-6%.

Hanoi will apply the 6% ownership registration tax as of May 1 instead of the 12% rate now being applied, while the other 62 provinces and cities will collect 5% instead of 10%.

With the new ownership registration tax rate, those who buy cars after April 30 will get big benefits. “Therefore, no one will be silly enough to buy cars at this moment,” said Tuan, a salesman for a Toyota sales agent.

For example, if buying a Hyundai Santa Fe 2.2 AT now, which has the sale price of $52,900, customers would have to pay $6,348 (12% of sale price) in ownership registration tax. Meanwhile, if buying the car after April 30, they will have to pay $3,174 only.

Prior to April, the car market was seething as people rushed to buy cars in anticipation of the luxury tax increase, commencing April 1. The models which sold best in the period were MPVs with 6-9 seats and vehicles with less than five seats with the cylinder capacities of 3,000 cu m and higher.

A lot of people complained after they heard about the car ownership registration tax decrease. They had to pay additional money to get cars before April 1 to avoid the high luxury tax. In order to avoid the high luxury tax, they had to pay a high ownership registration tax.

There are even those who experienced a ‘double’ loss, as they registered to buy cars before April 1, but did not receive them until after April 1. This means that they not only had to buy cars at high prices but they also had to pay a high ownership registration tax as well.

VietNamNet, TBKTVN

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