The Vietnamese government has decided to raise import taxes on automobiles as part of its efforts to reduce the soaring trade deficit, an official said on Monday.
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Deputy Finance Minister Do Hoang Anh Tuan, in a decision Thursday, increased tax on wholly assembled cars to 83% from 70% currently, a ministry official who identified himself only as Tu, told the Associated Press (AP).
Just last month, the government raised the import tax on imported cars from 60% and the prime minister was urging more tax hikes to cut surging trade deficit.
The government also raised the tax on imported parts by 3 to 5% to 25%, the official told AP. The new tax rates take effect on Tuesday.
“This new measure aims to cut the soaring trade deficit as instructed by the prime minister,” he said.
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By GlobalDataThe report said Vietnam posted a deficit of US$7.4bn in the first quarter of this year, up from $1.7bn in the same period of last year, according to government figures.
Auto sales are surging in Vietnam amid robust economic growth.
More than 10,000 wholly assembled cars were sold during the January-March quarter, the government said.
Sales of autos assembled in Vietnam jumped 180% from a year ago to 34,000 units during the same period, figures from Vietnam Automobile Manufacturers Association or Vama, showed.
“The new tax rates are unlikely to affect our sales,” Nguyen Hoai Anh, sales manager of a Toyota dealer in Hanoi, told AP.
“At the moment, demands for our cars exceed our production capability, our customers have to wait three to five months to have their cars delivered,” he said adding Toyota Vietnam is unlikely to raise prices considering the small increase in import tax on car parts.
