Larger cars to be taxed at higher rate while those prioritized for development to be subject to lower taxes.
The tax regime for automobile is set to change, with those consuming more fuel being subject to a higher special consumption tax.
The government has directed the Ministry of Finance and involved ministries to adjust the old tax regime, with an emphasis on reducing excise taxes on automobile types whose development has been prioritized.
Vehicles of nine seats or more and those with a capacity of 3 liters or more will be subject to higher excise tax rate. Such vehicles are unsuitable with Vietnam’s transport infrastructure, are too expensive for most people, and have huge emissions.
For large-scale projects producing prioritized vehicles and projects producing important groups of components, the government has called for the application of preferential corporate income tax rates, the amount of which will be determined by the government.
The government earlier approved the development strategy for Vietnam’s automobile industry to 2025 and vision to 2035. The overall objective is to build Vietnam's automobile industry so it will become a key industry and meet the needs of the domestic market and exports.
The goal to 2035 is to have total production of 1,531,400 units, of which 852,600 are nine-seat automobiles, 84,400 are vehicles of ten seats or more, 587,900 are trucks, and 6,500 are specialized vehicles. The number of domestically-assembled automobiles is to account for 78 per cent of domestic sales.