Decisions that have radically changed the Vietnamese car market. 2020 witnessed a series of major policies for the car industry in Vietnam, most of which bring positive changes to markets, businesses and consumers.
Abolished many conditions for importing cars
In February 2020, the Government issued Decree 17/2020/ND-CP amending and supplementing a number of articles of Decrees related to investment and business conditions in the field of government management of the Ministry of Industry and Trade, in which the regulations related to the import of cars were removed such as batch inspection, type certificate and quality assessment.
This is considered a timely and reasonable policy of the Government to reduce arising conditions, time and costs for car importers to return home. At the same time, adopt and implement international policies and conventions for the car business, which are considered sensitive in Vietnam.
Previously, in Decree 116/2017/ND-CP, many regulations and conditions for importing and trading cars have made it difficult for many private enterprises to import cars, some even bankrupted.
Components import tax is 0% for assembled cars
In July 2020, the Government issued Decree 57/2020/ND-CP amending and supplementing many regulations on tariffs on goods, components and raw materials imported into Vietnam.
The condition for enterprises to be granted 0% tax on importing raw materials is to produce a separate and general minimum quantity of finished products, vehicles and component assemblies. Once the enterprises produce sufficient quantities of both individually or suitably, they are entitled to this preferential rate and vice versa.
The policy of reducing input costs for businesses is considered an initiative in a series of policies for the automobile industry so far. The reduction of component import tax helps reduce production costs, thereby reducing car prices, increasing the competitive advantage of car prices in the domestic market.
In 2021, there is no “special offer” for reducing registration fee by 50%
In 2020, facing unprecedented difficulties for domestic car manufacturing and assembling enterprises, the Government had decided to reduce 50% of registration fee for domestically manufactured and assembled vehicles that were registered for the first time.
Recently, with the approval of the Prime Minister, the Ministry of Finance has issued a Circular guiding the reduction of fees and charges in 29 areas of business, there is no registration fee for domestic vehicles. That is, the 50% reduction in registration fees for first-registered domestic vehicles will officially expire in 2021.
However, to increase aggregate demand, solve problems and build a brand, some car manufacturers, assemblers or importers in 2020 have supported 100% of registration fees to car buyers. Even this policy is also revealed by some firms that they can continue to cut 50-100% when they have enough sales and dominate the target market.
Imported vehicles are exempt from emissions testing
As part of the policies to remove difficulties for imported cars and models, recently the Ministry of Transport and Transport issued a Circular stating the exemption from emission testing for imported models that have been certified and tested for gas waste was previously issued by the competent State agency for similar models of vehicles and models.
Car excise tax could be adjusted
In Notice No. 377/TB-VPCP dated 11/11/2020, Deputy Prime Minister Trinh Dinh Dung assigned the Ministry of Finance, the Ministry of Industry and Trade and the State Bank of Vietnam to study and propose policies on tax and incentive credit and conditions for the domestic automobile and supporting industries to develop and report to the Prime Minister.
Vietnam opens the door to foreign cars
Up to now, Vietnam has completely abolished import tax on CBU cars from ASEAN countries under the ASEAN Economic Community (AEC – formerly ATIGA) mechanism for 2 years. As a result, a series of Thai and Indonesian models and models have been and promised to rule the roost in Vietnam.
In the coming time, Vietnam will in turn cut down car import tax rate schedules with EU countries, including car havens such as Germany, France, Italy, UK, Sweden, Mexico, Japan, Australia, even with the world’s No. 1 vehicle manufacturing and assembling country, is China.
The average reduction of 6-8% tax rate over the years is based on market-opening commitments that Vietnam has with partners such as the EU (EVFTA), such as the 10 Asia-Pacific countries (CPTPP) or other ASEAN countries with 5 major partners in the RCEP mechanism… can make the Vietnamese car market more attractive in the near future and become more competitive.