kude.punny

Vietnam Lowers Used Car Import Tax

The Vietnamese Ministry of Finance endorsed a decision to cut some used car import taxes by five percent Tuesday.

The 5 percent reduction will be imposed on 1.0 to 3.0 liter engine used automobiles.

There will be no cuts in the current tax rate of $3,000 on under 1.0 liter engine cars with less than five seats and the $15,000 on over 3.0 liter engine units in the 10 -15 seat group.

Under the new decision, the tariff on the 6 – 9 seat group with over 3.0 – 5.0 liter engines will be increased between 4.5 and 6.8 percent.

As of May 1 last year, Vietnam lifted the ban on the import of used automobiles of 15 seats or less, only allowing cars less than five years old to enter the country.

It prescribes duties of $3,000-25,000 (including flat tax, special consumption tax and valued-added tax) per vehicle depending on the specifics of each model, aiming to price them at about 75 percent of a similar new car.

Under the country’s WTO commitments, used imports are set to bear two kinds of taxes: an absolute tax and percentage tax.

The percentage tax is expected to be 150 – 200 percent depending on car models; while the flat taxes will be between $10,000 and $15,000.

Vietnam imposes the flat tax but has yet to apply the percentage tax.

The General Department of Customs said some 500 secondhand cars had landed in Vietnam last year after the government revoked the ban on used imports.

Of this, 60 percent were luxury cars and 30 percent were small cars with the cylinder capacity of less than 1.0L.

The high-end models in largest quantity imports included BMW, Mercedes and Lexus, some of which were prescribes duties of a whopping $50,000.

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