Auto registration fees to surge

The registration fee for passenger vehicles with fewer than nine seats will be increased in Ha Noi and HCM City early next year from 15 per cent to 20 per cent of the vehicle’s purchase price, under an expected decision from the Ministry of Finance.

Outside of Ha Noi and HCM City, registration fees would be set between 10 and 20 per cent, depending on the local economic situation.

The increase was necessary to discourage the rapid growth of personal vehicles, blamed for snarling traffic in the nation’s major cities, as well as significantly raise revenue stream for the State budget.

Automobile registration fees were an important source of State revenues, the ministry said, generating VND7 trillion (US$359 million) annually, or about 2.5 per cent of the nation’s total budget.

Nguyen Ngoc An, a salesman at an auto showroom on Ha Noi’s Au Co Street, predicted the fee surge would further inflate the price of a new car, already high due to heavy import and excise taxes.

Auto sales have surged significantly in the country in recent years amid robust economic growth. According to data published by the Viet Nam Automobile Manufacturers Association, 17 automakers in the country sold a combined 99,978 vehicles in the first eleven months of this year.

The nation imported 46,940 complete-built vehicles worth $856.4 million during the period, according to the General Department of Customs.

The Ministry of Finance earlier this month shaved tariffs on imported vehicles, effective January 1. Under the new tariff regime, vehicles with fewer than nine seats and an engine capacity of 1.8-2.5 litres would see import taxes lowered by 1 per cent to 82 per cent. Meanwhile rates for vehicles with larger engine sizes would fall by 6 per cent to 77 per cent.