The Ministry of Finance is planning to reduce import taxes on brand new, fully assembled trucks, as of January 1, 2011 under the commitment to World Trade Organization.
Photo: AFP " style="text-decoration:none"> Photo: AFP
It has consulted with relevant agencies and the Vietnam Automobile Manufacturers’ Association (VAMA) on the tax cut plan on complete built unit (CBU) trucks. The new tax rates are all lower than the currently applied levels and lower than the levels committed by Vietnam when joining the WTO.
The tentative tariff on under-five-ton trucks is 30 percent, 50 percent lower than the currently applied rate and 40 percent lower than the committed level.
As for 5-10 ton trucks and 10-20 ton trucks, the new tax rate is 25 percent, while the current rates are 54-55 percent and 30 percent respectively, and the WTO stipulated level is 50 percent.
The tax rates are 15 percent, 8 percent and 25 percent respectively, for 20-45 ton trucks.
Only the trucks weighing over 45 tons and specialized vehicles will see the tax rates unchanged.
But domestic auto manufacturers say the planned import tax cut on truck will kill them, according to newswire Vietnamnet.
Tran Ba Duong, General Director of Thaco Group, told the newswire that the sudden sharp cut of the tariffs would push domestic automobile manufacturers to the wall, adding since it had injected trillions of dong in its plants, the tax cut was likely to force domestic manufacturers into bankruptcy.
Bui Ngoc Huyen, General Director of Vinaxuki, also told Vietnamnet that Vinaxuki had spent a lot of money on increasing the ratio of locally made products/parts to 50 percent, so if tax cut was realized, it would have to shut down the plant and give up the hope of making Vietnamese vehicles.
Director of the Heavy Industry Department under the Ministry of Industry and Trade Nguyen Manh Quan also told the newswire that the sharp tariff cut seems unreasonable, especially when some domestic manufacturers have made hefty investment to increase the localization ratio of the products.
In the first nine months of the year, Vietnam produced 77,400 vehicles, including 29,900 trucks.