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Vietnam Raises Taxes to Curb Car Import
2010-0311
Import expenditure of completely-built cars in February continued on the downtrend. In the first two months of this year, Vietnam invested US$94 million in importing 5,900 autos.
Domestic auto producers lodged a complaint against price frauds in coVietnam Automobile Manufacturers' Association (VAMA) sent a document proposing measures to tighten control over imported autos, this is the second time since last October, the price list of the General Department of Customs has been revised. This time, the tax levels for imported cars have increased between 2 per cent and 20 per cent. Tax calculating levels issued in the list are based on opinions of prices, exchange rate changes between VND and foreign currencies, policies and prices of importers and suppliers.
In the list applied for this year, thousands of autos are managed to prevent price risks. Cars bearing famous brands like Toyota, Honda, BMW, Mercedes-Benz, Lexus, Porsche, Chrysler and Hummer account for the majority of these. Prices of many new and completely-built cars and used ones have been raised by several thousands of USD and even up to tens of thousands of USD.
A number of autos have remarkable tax increase. Toyota Camry LE, which has five seats and a cylinder capacity of 2.4 litres and is produced by Japan and the U.S. last year, is sold at US$18,000. The 3.5-litre car of the same kind has price of US$20,000 against the old levels of US$17,000. four-seat Camry Hybrid, which was produced in Japan in 2009 and has the cylinder capacity of 2.4 litre, is sold at US$22,000 compared to the old price of US$20,000. The U.S.’s seven-seat Toyota Venza, produced with the 2.7-litre capacity and two wheel drive, has the price of US$21,000 and US$22,000 is the price of four wheel drive of the same kind, while the old level was US$20,000 USD. Toyota Venza, with the cylinder capacity of 3.5 litre, has the minimum price of US$23,000 for and US$24,000 for. The previous price was US$22,000. However, compared to last year, the lowest price fixed by the customs agency for 2010 increases by between US$1,000 and US$2,000, depending on different kinds.
Prices of some other auto lines such as Toyota Corolla have risen by roughly US$1,500 against last year. The increase ranges from US$1,000 to several tens of USD for high-grade lines, including Bentley, BMW, Cadilac and Chrysler.
Before the General Department of Customs issued the risk management list on imported cars’ prices, the foreign auto market had ever seen a sharp fall in import value. Vietnam estimates to import 2,500 autos worth US$39 million in February, while the figure in January was 3,400 units costing US$55 million. In November and December last year, the country imported 11,500 and 11,000 autos respectively. Despite the low import volume, compared to the same period of 2009, import spending of completely-built autos in the first two months of 2010 even grew 66.4 per cent and 40.5 per cent in value respectively.
Imported auto businesses said car sales between January and February dropped by 30 per cent and 40 per cent on-year. Some said the power purchase have even decreased by 50 per cent. A number of auto importers are racing to launch promotional programmes, however, they still fail to attract customers. The fall in sales is due to the fact that customer no longer enjoy priorities in value added tax and registration tax, therefore, they will have to spend 10 per cent-12 per cent more to buy cars. Besides, banks have also limited credit subsidy for car buyers, while exchange rate rise has pushed the car market into the quite atmosphere.
The fall in the imported cars so far this year is due to the increase in value added tax and registration tax. In addition, the application of new taxes continues raising prices of imported cars. The issuance and application of risk management list and increased taxes will directly affect import spending of completely-built cars which are currently among commodities needed to be limited for import. This is one of the moves to control the imported completely-built car market which is witnessing a very fast-growing rate. According to the General Department of Statistics, Vietnam spent about US$1.712 billion on importing 76,000 autos, a record high figure in both number of cars and the import value. Car import is among reasons leading to the rise in trade deficit.
Regarding this, earlier, the prime minister has instructed the Ministry of Finance and the General Department of Customs to review the price list to meet with the market demand. The Ministry of Industry and Trade is seeking opinions from the ministries of Transport and Finance to build a circular guiding the import of new cars for passenger transport of below 16 seats. The regulation that car importers are only allowed to open customs declarations at five international border gate ports is among solutions to control the car import.
Domestic auto producers lodged a complaint against price frauds in coVietnam Automobile Manufacturers' Association (VAMA) sent a document proposing measures to tighten control over imported autos, this is the second time since last October, the price list of the General Department of Customs has been revised. This time, the tax levels for imported cars have increased between 2 per cent and 20 per cent. Tax calculating levels issued in the list are based on opinions of prices, exchange rate changes between VND and foreign currencies, policies and prices of importers and suppliers.
In the list applied for this year, thousands of autos are managed to prevent price risks. Cars bearing famous brands like Toyota, Honda, BMW, Mercedes-Benz, Lexus, Porsche, Chrysler and Hummer account for the majority of these. Prices of many new and completely-built cars and used ones have been raised by several thousands of USD and even up to tens of thousands of USD.
A number of autos have remarkable tax increase. Toyota Camry LE, which has five seats and a cylinder capacity of 2.4 litres and is produced by Japan and the U.S. last year, is sold at US$18,000. The 3.5-litre car of the same kind has price of US$20,000 against the old levels of US$17,000. four-seat Camry Hybrid, which was produced in Japan in 2009 and has the cylinder capacity of 2.4 litre, is sold at US$22,000 compared to the old price of US$20,000. The U.S.’s seven-seat Toyota Venza, produced with the 2.7-litre capacity and two wheel drive, has the price of US$21,000 and US$22,000 is the price of four wheel drive of the same kind, while the old level was US$20,000 USD. Toyota Venza, with the cylinder capacity of 3.5 litre, has the minimum price of US$23,000 for and US$24,000 for. The previous price was US$22,000. However, compared to last year, the lowest price fixed by the customs agency for 2010 increases by between US$1,000 and US$2,000, depending on different kinds.
Prices of some other auto lines such as Toyota Corolla have risen by roughly US$1,500 against last year. The increase ranges from US$1,000 to several tens of USD for high-grade lines, including Bentley, BMW, Cadilac and Chrysler.
Before the General Department of Customs issued the risk management list on imported cars’ prices, the foreign auto market had ever seen a sharp fall in import value. Vietnam estimates to import 2,500 autos worth US$39 million in February, while the figure in January was 3,400 units costing US$55 million. In November and December last year, the country imported 11,500 and 11,000 autos respectively. Despite the low import volume, compared to the same period of 2009, import spending of completely-built autos in the first two months of 2010 even grew 66.4 per cent and 40.5 per cent in value respectively.
Imported auto businesses said car sales between January and February dropped by 30 per cent and 40 per cent on-year. Some said the power purchase have even decreased by 50 per cent. A number of auto importers are racing to launch promotional programmes, however, they still fail to attract customers. The fall in sales is due to the fact that customer no longer enjoy priorities in value added tax and registration tax, therefore, they will have to spend 10 per cent-12 per cent more to buy cars. Besides, banks have also limited credit subsidy for car buyers, while exchange rate rise has pushed the car market into the quite atmosphere.
The fall in the imported cars so far this year is due to the increase in value added tax and registration tax. In addition, the application of new taxes continues raising prices of imported cars. The issuance and application of risk management list and increased taxes will directly affect import spending of completely-built cars which are currently among commodities needed to be limited for import. This is one of the moves to control the imported completely-built car market which is witnessing a very fast-growing rate. According to the General Department of Statistics, Vietnam spent about US$1.712 billion on importing 76,000 autos, a record high figure in both number of cars and the import value. Car import is among reasons leading to the rise in trade deficit.
Regarding this, earlier, the prime minister has instructed the Ministry of Finance and the General Department of Customs to review the price list to meet with the market demand. The Ministry of Industry and Trade is seeking opinions from the ministries of Transport and Finance to build a circular guiding the import of new cars for passenger transport of below 16 seats. The regulation that car importers are only allowed to open customs declarations at five international border gate ports is among solutions to control the car import.
Source: VCCI
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