Under the draft tariff compiled by MoF, several kinds of CBU imported cars will be imposed with a tax of 70% instead of 80%. These include cars capable of carrying 8 persons at maximum (including driver); cars capable of carrying more than 10 persons; 4WD cars; cars having diesel engines; cars having internal combustion engines with cylinder capacities of from 1,800cc to 4,000cc; cars designed to carry people (not including ones belonging to 87.02 group); vehicles specially designed for travelling on snow; and golf-class vehicles.
The new tariff is expected by MoF to be effective as of August 8, 2007.
As for used imports, MoF is also considering lowering the tax on medium-size cars by 5%, which would become effective on the same day as the tariff on brand new imports. The ministry has calculated that with the reduction of 5%, the average tax on every used car will be $1,000 lower.
MoF in February 2007 reduced the tax rates on used imports by 15-20%, which made the taxes lower by $1,500-3,000 per unit.
Under WTO commitments, the import tax on vehicles for carrying people can be 100% at maximum. Vehicles for carrying people now have the protection tax rate of 80%. However, the still relatively high protection level has led to the higher prices of cars in Vietnam compared to those in other regional countries and in the world.
Deputy Minister of Finance Truong Chi Trung said that MoF on August 4 officially asked the government to allow the application of the new tariff as of August 8.
Prior to that, when Vietnam officially became a member of the WTO on January 11, 2007, MoF lowered the tariff on imported cars from 90% to 80%.
In another move, MoF has decided to lower the tax rates on car parts. The 10% tax rate (instead of 20%) will be levied on the imports of semi-assembled engines used for vans of 10-20 tonnes. Used vehicles for carrying cargo with the maximum tonnage of 20-24 tonnes will bear the tax rate of 30% instead of 35%, while several other kinds of parts and accessories will be imposed 10%, 15% and 20%.
The new tariff is expected by MoF to be effective as of August 8, 2007.
As for used imports, MoF is also considering lowering the tax on medium-size cars by 5%, which would become effective on the same day as the tariff on brand new imports. The ministry has calculated that with the reduction of 5%, the average tax on every used car will be $1,000 lower.
MoF in February 2007 reduced the tax rates on used imports by 15-20%, which made the taxes lower by $1,500-3,000 per unit.
Under WTO commitments, the import tax on vehicles for carrying people can be 100% at maximum. Vehicles for carrying people now have the protection tax rate of 80%. However, the still relatively high protection level has led to the higher prices of cars in Vietnam compared to those in other regional countries and in the world.
Deputy Minister of Finance Truong Chi Trung said that MoF on August 4 officially asked the government to allow the application of the new tariff as of August 8.
Prior to that, when Vietnam officially became a member of the WTO on January 11, 2007, MoF lowered the tariff on imported cars from 90% to 80%.
In another move, MoF has decided to lower the tax rates on car parts. The 10% tax rate (instead of 20%) will be levied on the imports of semi-assembled engines used for vans of 10-20 tonnes. Used vehicles for carrying cargo with the maximum tonnage of 20-24 tonnes will bear the tax rate of 30% instead of 35%, while several other kinds of parts and accessories will be imposed 10%, 15% and 20%.
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