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Auto component excise taxes may go

Released at: 14:25, 12/06/2017

Auto component excise taxes may go

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MoIT proposes taxes be removed as part of developing local auto sector.

by Tue Lam

The Ministry of Industry and Trade (MoIT) has proposed that excise taxes not be applied on auto components manufactured in Vietnam.

If approved, the proposal would be the greatest incentive offered to date for auto joint ventures and companies in the country.

The proposal is included in a report on the automotive industry development strategy, which features a range of suggestions to develop the industry.  

According to the report, the market size, consumption, and production capacity of the domestic auto industry will surpass that of the Philippines, the fourth-largest auto producer in ASEAN.

MoIT also proposed three groups of solutions to develop the industry. The first is to create a sufficiently large consumer market, which emphasizes transparent and healthy development through measures to combat trade fraud and technical barriers.

The second is to support and enhance the production capacity and competitiveness of domestic automobile assemblers in key products that are competitive with those of other countries in the region, applying suitable excise tax rates for vehicles with high added-value and manufactured in the country and not applying excise taxes on locally-generated components. At the same time, corporate income taxes would be adjusted on large-scale production and assembly projects.

Thirdly, MoIT proposes the government and the Ministry of Planning and Investment attract investment by multinational corporations to invest in large-scale projects in Vietnam, with particular focus on large corporations and types of cars not produced in ASEAN.

The Ministry of Transport has been requested to shorten the time needed for registering motor cars assembled in the country, adopt more stringent inspection standards for used vehicles entering Vietnam, avoid commercial fraud, and ensure vehicle quality.

According to figures from the Vietnam Automobile Manufacturers Association (VAMA), industry sales in 2016 grew 24.3 per cent against 2015, to 304,427 units. Sales of motor cars assembled in Vietnam jumped 32 per cent while imported vehicles were up 5 per cent. The Truong Hai Auto Corp., which assembles trucks, buses, and sedans, led sales, followed by Toyota Motor Vietnam.

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