Import tax on used cars to be increased by 20%
Import taxes on used cars of nine seats or fewer and an engine displacement of less than 1,500cc will increase by up to 20 per cent on April 28.
The tax for each used car with a cylinder capacity of between 1,000-1,500cc will become $9,600, a rise of $1,600.
The adjustment will narrow the gap between import tax on used cars and brand new cars, especially in the compact car division.
Deputy Prime Minister Hoang Trung Hai last month asked the Ministry of Finance to review the import tax on used cars in a bid to restrain importers from disguising brand new vehicles as old ones to avoid higher tax rates.
It followed a proposal from local automaker Thaco Group, who reported that companies were fraudulently importing cars with small engines in order to be charged in the lowest tax bracket.
According to recent regulations, in order to be defined as second-hand, used cars must have been registered in a foreign country for at least six months before being exported to Vietnam and they must have a minimum mileage of 10,000 km.
Thaco claimed that many importers disguised brand new cars as used ones by adjusting the mileage counters to over 10,000 km and changing import documentation, allowing them to avoid the 70 per cent tax imposed on new cars.
Kia Morning cars assembled by Thaco in Vietnam bear a special $4,500 consumption tax plus $2,500 of import tax for parts and accessories.
"That means fraud is resulting in unfair competition between imported cars and locally assembled cars, especially of the brand that we are assembling," said Thaco's CEO Tran Ba Duong.
According to Thaco's independent survey, as many as 700 used Kia Morning cars were imported to Vietnam in January only, a considerable increase from previous months.
However, according to the General Department of Statistics, the country imported 3,000 cars in January and imported just 1,000 cars in February.
It imported 27,000 cars in 2012, down 50 per cent year on year.
Imported cars at the An Phu Auto showroom in Ha Noi. Import taxes on some types of used cars will be increased next month
According to Circular 28/2013/TT-BTC issued by the Ministry of Finance, the import tax imposed on used cars with engine displacement of less than 1,000cc will be US$4,200 per unit instead of the current $$3,500.The tax for each used car with a cylinder capacity of between 1,000-1,500cc will become $9,600, a rise of $1,600.
The adjustment will narrow the gap between import tax on used cars and brand new cars, especially in the compact car division.
Deputy Prime Minister Hoang Trung Hai last month asked the Ministry of Finance to review the import tax on used cars in a bid to restrain importers from disguising brand new vehicles as old ones to avoid higher tax rates.
It followed a proposal from local automaker Thaco Group, who reported that companies were fraudulently importing cars with small engines in order to be charged in the lowest tax bracket.
According to recent regulations, in order to be defined as second-hand, used cars must have been registered in a foreign country for at least six months before being exported to Vietnam and they must have a minimum mileage of 10,000 km.
Thaco claimed that many importers disguised brand new cars as used ones by adjusting the mileage counters to over 10,000 km and changing import documentation, allowing them to avoid the 70 per cent tax imposed on new cars.
Kia Morning cars assembled by Thaco in Vietnam bear a special $4,500 consumption tax plus $2,500 of import tax for parts and accessories.
"That means fraud is resulting in unfair competition between imported cars and locally assembled cars, especially of the brand that we are assembling," said Thaco's CEO Tran Ba Duong.
According to Thaco's independent survey, as many as 700 used Kia Morning cars were imported to Vietnam in January only, a considerable increase from previous months.
However, according to the General Department of Statistics, the country imported 3,000 cars in January and imported just 1,000 cars in February.
It imported 27,000 cars in 2012, down 50 per cent year on year.
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