Auto association proposes luxury tax cuts

The Vietnam Automobile Manufacturers' Association (VAMA) proposed to cut special consumption tax on automobiles to reduce local production cost which is 20 percent higher than that of other nations in the Southeast Asia region at a seminar this morning.

The Vietnam Automobile Manufacturers' Association proposes to reduce special consumption tax to lower local production costs (Photo: SGGP)

Disadvantage in local production cost has been caused by the objective factor of small scale market and subjective reason of unreasonable tax policy, the association said.
 
It proposed to impose luxury tax on prices ex works for locally assembled items, apply different tax cut levels on each automobile line, abolish this tax on passenger buses of 16-24 seaters because they belong to commercial passenger automobile line serving residents’ travel from remote areas to urban areas, from districts to districts and provinces to provinces.
 
Delegates at the seminar also agreed that local production has showed disadvantages resulting in high production cost. The sole advantage has been from low labor cost but this is inconsiderable. Therefore, there should have many measures to lower the production cost.
 
Ms. Nguyen Thi Xuan Thuy from the Institute for Industry Policy and Strategy under the Ministry of Industry and Trade said that one of the most important policies is on tax.
 
It is necessary to urgently cut import tariff on automobile components to zero percent, permit some component sources from ASEAN which have not met localization rate requirements to enjoy zero percent tax rate during a time-limit, and allow accessories manufacturers to supply local businesses, she proposed.
 
Special consumption tax should be calculated reasonably to ensure healthy development and prevent excessive growth, she added.
 
Formerly at the 10th session of the National Assembly, law making body decided yet to approve two major draft tax laws for more consideration and calculations.

By Anh Phuong – Translated by Hai Mien

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