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March 26, 2003

VIETNAM: Government reacts to car makers’ complaints over component tax hike

Complaints from car makers over a proposed tax hike on imported components appear to have been heard by the Vietnamese government. Press reports say that, as scheduled, the tax rates applicable to car component imports in ‘CKD2’ form will be adjusted as from 1 April but the Finance Ministry said those tax rates would temporarily remain unchanged.

By bcusack

Complaints from car makers over a proposed tax hike on imported components appear to have been heard by the Vietnamese government.

Press reports say that, as scheduled, the tax rates applicable to car component imports in ‘CKD2’ form will be adjusted as from 1 April but the Finance Ministry said those tax rates would temporarily remain unchanged.

Dang Thi Binh An, the deputy general director of the country’s general department of taxation said that her department has asked the government for a solution on the car manufacturers’ petition relating to the tax adjustment.

Under the plan, tax rates imposed on car component imports in CKD2 form would be increased from 20% (4-15 passenger cars); and 7% (lorries) to a common rate of 50% by 2005. Apart from the import tax, the finance ministry intends to raise the special consumption tax applicable to cars which is currently 5%.

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