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Government says no more auto tax incentives
2009-1113
Policies on tax cuts applied to cars and car parts will stop in one month, the Government has announced.
The Government’s decision has put an end to arguments over whether to extend the policy on value added tax (VAT) and ownership registration tax reductions for cars and car parts.
After December 31, 2009, the ownership registration tax on cars in Hanoi and HCM City will return to the previous rate of 12 percent instead of six percent as currently applied. Meanwhile, the ownership registration tax in other provinces and cities will be 10 percent instead of five percent.
Meanwhile, VAT on cars and some other categories of products will also return to the previous level of 10 percent instead of five percent.
Prior to that, the Vietnam Automobile Manufacturers’ Association (VAMA) asked the Ministry of Finance (MOF) and other relevant ministries to consider extending tax incentives until the end of 2010 in order to help develop the domestic car market. The association fears the removal of tax incentives may lead to a sharp fall in car sales.
Under the Government’s November 11 resolution, businesses will still be able to enjoy corporate income tax payment delay until the end of the first quarter of 2010. In order to be eligible businesses must be small and medium enterprises, making garments, footwear products and use many labourers.
The policies on VAT and ownership registration tax reductions on key products have been applied since February 1, 2009 under a Government decision aimed at stimulating consumption demand and investment and to fight the economic downturn.
According to the General Taxation Department (GDT), corporate income tax reduction and tax payment delay, and the VAT reduction provided a financial boost of 15,692 billion dong in the first half of the year
The report by the National Assembly’s Standing Committee released yesterday, showed that since 2007, Vietnam has to cut 1,500-2,000 tariff lines since 2007. This has resulted in the decrease of 2,000-3,000 billion dong a year in state budget collection.
Vietnam will continue cutting tax as committed with the expected loss to the state of 3 trillion dong in 2010.
The Government’s decision has put an end to arguments over whether to extend the policy on value added tax (VAT) and ownership registration tax reductions for cars and car parts.
After December 31, 2009, the ownership registration tax on cars in Hanoi and HCM City will return to the previous rate of 12 percent instead of six percent as currently applied. Meanwhile, the ownership registration tax in other provinces and cities will be 10 percent instead of five percent.
Meanwhile, VAT on cars and some other categories of products will also return to the previous level of 10 percent instead of five percent.
Prior to that, the Vietnam Automobile Manufacturers’ Association (VAMA) asked the Ministry of Finance (MOF) and other relevant ministries to consider extending tax incentives until the end of 2010 in order to help develop the domestic car market. The association fears the removal of tax incentives may lead to a sharp fall in car sales.
Under the Government’s November 11 resolution, businesses will still be able to enjoy corporate income tax payment delay until the end of the first quarter of 2010. In order to be eligible businesses must be small and medium enterprises, making garments, footwear products and use many labourers.
The policies on VAT and ownership registration tax reductions on key products have been applied since February 1, 2009 under a Government decision aimed at stimulating consumption demand and investment and to fight the economic downturn.
According to the General Taxation Department (GDT), corporate income tax reduction and tax payment delay, and the VAT reduction provided a financial boost of 15,692 billion dong in the first half of the year
The report by the National Assembly’s Standing Committee released yesterday, showed that since 2007, Vietnam has to cut 1,500-2,000 tariff lines since 2007. This has resulted in the decrease of 2,000-3,000 billion dong a year in state budget collection.
Vietnam will continue cutting tax as committed with the expected loss to the state of 3 trillion dong in 2010.
Source: VietnamNet
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