HANOI: The Government of Vietnam has announced a new tax policy designed to encourage more sales of vehicles with small engines, while increasing the cost of gas-guzzling larger cars.
Under a draft law announced by the Ministry of Finance on August 19, special consumption tax on a car with an engine of 1.5 liters or less will fall from the current 45 percent to 25-30 percent. Vehicles with a 1.5-2 liter engine will be subject to special consumption tax of between 45 and 50 percent.
The special consumption tax rate for cars with engines of more than three liters will be raised from the current 60 percent to 75 percent. The changes are due to to be introduced on July 1, 2016.
The new consumption tax structure is designed to stimulate the production and purchase of smaller cars in Vietnam following a fall in vehicle sales.
According to data issued by the Customs Office, Vietnam imported 9,504 complete built units in July for a total value of USD208.5m, a 1.8 percent fall in quantity and 32.1 percent decline in value from the previous month.
