Tariff cut spurs auto import in Vietnam

The Ministry of Industry and Trade yesterday said that over 60,600 CBU (completely built unit) automobiles worth US$1.4 billion were imported into Vietnam during the first seven months this year.

An car shop in HCMC (Photo: SGGP)

Thailand continued to be the largest auto supply market of Vietnam with 18,837 automobiles being imported during the seven months, followed by South Korean, India, China and Japan.

Indonesia has been an emerging auto exporter to Vietnam with the export volume strongly rising to 1,347 autos worth US$17.8 million.

Thai cars have been favorites of Vietnamese thanks to various lines of products and affordable price. Most of them are priced less than VND1 billion (US$45,000) including taxes and fees.

According to the ministry, ASEAN tax reduction has caused the strong import of automobiles from Thailand and Indonesia.

Import tariff rate from ASEAN market has reduced from 50 percent to 40 percent, which will continue sliding to 30 percent next year and 0 percent in 2018.

In addition, other free trade agreements such as the Trans-Pacific Partnership, Vietnam-EU and Vietnam-South Korea comprise clauses to remove auto tariff in the roadmap of 10-15 years.

The Law on Special Consumption Tax effective on July 10 also reduces the tax rate from 45 to 40 percent on lines of automobiles with the cylinder capacity of below 1.5 liters. It will fall to 35 percent in 2017.

The rate will fall to 40 percent on items with the capacity of 1.5-1 liters.

By Lac Phong – Translated by Hai Mien

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