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Imported used cars hit with double tax
2011-0729
From next month, import tax on secondhand cars will include not only an ad valorem tax but also a per unit tax (fixed tax).
Prime Minister Nguyen Tan Dung on Wednesday signed Decree 36/2011/QD-TTg levying new taxes on used foreign cars in an effort to curtail imports following a Ministry of Finance proposal.
The new ad valorem tax rate will be based on specific car types like the 78-83% rate for brand-new cars, while the per unit tax will range from US$5,000-US$15,000 each, depending on specific vehicle types.
According to the decree, used cars with less than nine seats and a cylinder capacity between 1,500-2,500cc will pay import tax of US$5,000 per unit. For more than 2,500cc it is US$15,000 per unit but under 1,500cc it is US$3,500.
Similarly, used cars between 10-15 seats with a cylinder capacity below 2,000cc will pay US$9,500 per unit; for 2,000-3,000cc the charge is US$13,000 per unit; and over 3,000cc it is US$17,000 per unit.
When implementing the new regulation, the new taxes can swing 20% either way depending on the situation, according to the decree.
A lot of used car dealers complained the new tax policy on used car imports will make their business unprofitable and force them to seek other businesses.
They said that with the new tax policy, the price of used imported cars will increase significantly and maybe even rise above the prices of new cars.
Prime Minister Nguyen Tan Dung on Wednesday signed Decree 36/2011/QD-TTg levying new taxes on used foreign cars in an effort to curtail imports following a Ministry of Finance proposal.
The new ad valorem tax rate will be based on specific car types like the 78-83% rate for brand-new cars, while the per unit tax will range from US$5,000-US$15,000 each, depending on specific vehicle types.
According to the decree, used cars with less than nine seats and a cylinder capacity between 1,500-2,500cc will pay import tax of US$5,000 per unit. For more than 2,500cc it is US$15,000 per unit but under 1,500cc it is US$3,500.
Similarly, used cars between 10-15 seats with a cylinder capacity below 2,000cc will pay US$9,500 per unit; for 2,000-3,000cc the charge is US$13,000 per unit; and over 3,000cc it is US$17,000 per unit.
When implementing the new regulation, the new taxes can swing 20% either way depending on the situation, according to the decree.
A lot of used car dealers complained the new tax policy on used car imports will make their business unprofitable and force them to seek other businesses.
They said that with the new tax policy, the price of used imported cars will increase significantly and maybe even rise above the prices of new cars.
Source: SGT
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