A report in the Vietnam Economic Times says that used car importers’ business is drying up because ‘information about the tax policies for the post-WTO period remains unclear’.
The report says that some 200 used cars have been imported to Vietnam over the last six months, since the Vietnamese government agreed to lift the ban on used imports. Of this amount, 131 units went through HCM City’s ports.
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Viet Hai Company Ltd had to re-export the 1,800 cc Toyota Corolla imported from the US, since the car could not meet the requirements on exhaust fumes, the paper said.
However, technical barriers are not the biggest problem used car importers are facing. With the current tariff on used imports, car dealers cannot make a profit if they import popular and medium-class vehicles, according to the report.
Used car imports are mainly luxury vehicles. According to the ‘Saigon 3 Customs Agency’, the most expensive used car ever imported had a declared value of US$60,000 – a BMW 760Li, manufactured in 2003.
Customs officials said that the number of used cars imported to Vietnam will increase towards the Lunar New Year.
Meanwhile, car dealers said that they have not made business plans yet, in the sale season, as they ‘heard that the Ministry of Finance would tax used imports 200%, which will make used car imports unprofitable’. If so, car dealers will stop importing used cars.
Pham Huu Tam, Director of Tradoco, an used car importer, said that he has cancelled the orders with foreign partners when hearing the news about the higher tax rate.
Meanwhile, an official from the Ministry of Industry said that under the commitments for joining WTO, used cars are not listed as the subjects of the preferential tariff.
The report added that car dealers said that with the supposed high tax rate, used cars will be very expensive which will make them unmarketable. Meanwhile, imported 100% brand new cars will enjoy preferential tax rates, and thus will be favoured by customers, they said.
