Vietnam’s Auto Imports Plunge as Local Firms Await Tax Removal in 2018

Ngan Nguyen

13:29 06/12/2017

BizLIVE - The number of cars imported into Vietnam has taken a dive in recent months, as merchants are on a standby mode for the removal of import duty starting January.

Vietnam’s Auto Imports Plunge as Local Firms Await Tax Removal in 2018

Car imports have plunged in Vietnam.

A sharp decrease in the number of imported cars into Vietnam has been recorded in recent months, from nearly 3,700 units in August to 878 units in October, customs data shows.
From January 1, 2018, the import duties on autos and many other commodities from the Association of Southeast Asian Nations (ASEAN) will be cut to zero percent in Vietnam. Many local importing firms seem to partially halt their imports at the moment to await the tax reduction, said an official.
Luu Manh Tuong, director of the Import and Export Taxation Department under the General Department of Vietnam Customs, made the remark at a press conference last week.
“These companies just import a certain limited amount, whereas most of the time they await after January 1, 2018 for sharper decreases in import taxes,” said Tuong.
“Taking auto imports for example. Normally, Vietnam imports thousands of automobiles each month. However, since the beginning of September, the figure has dropped drastically to only hundreds per month,” the official added.
Speaking to the media, a representative from Vietnam’s northern Hai Phong port city’s customs department, said in the early months of this year, the department collected some 1 trillion dong ($44.25 million) of tax from imported completely built up (CBU) cars.
However, since October, the imports of CBUs has witnessed a plunge, causing a fall in the department’s tax revenue, with a total of 100 billion dong ($4.42 million) collected.
In early November, the CBU import stood still at the port. It is expected that even in December, local firms will not resume their import activities but wait for the tax reduction from January 1, 2018 on, said the representative.
Statistics by Vietnam Customs showed that in October 2017, Vietnam imported humbly 878 under-9-seat autos. In the previous month, as many as 918 autos were imported while in August, the figure was nearly 3,700 ones.
If compared to October last year (with over 4,300 imported cars), the respective figure of October this year went around five times down.
In the first ten months of this year, Vietnam imported some 34,430 automobiles worth $622 million. As such, on average, each imported car in Vietnam costs over 410 million dong ($18,100), excluding all taxes and fees.
According to the Import and Export Taxation Department, in 2018, 90% of ASEAN-originated goods and commodities will enjoy free tax, especially autos, which will surely have impacts on tax collections.
“It can be anticipated a reduction in import tax but a rise in domestic taxes,” said Tuong.

NGAN NGUYEN

Từ khóa: Vietnam, ASEAN

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