HANOI: Vietnam’s government has abolished tax exemptions on cars imported by returning Viet Kieu (overseas Vietnamese) following suspected smuggling of luxury vehicles. A government decision issued last month vetoed a decision made in August 2015 that granted import tariff and VAT exemptions for cars imported by overseas Vietnamese who return to live or work in Vietnam.
The old rule allowed them to import a car and a motorbike duty-free as used assets if they were moving back permanently or working in Vietnam at the request of government agencies for at least 12 months. But many people have abused the policy to import luxury cars without paying taxes to resell them in Vietnam. Some people have also registered for permanent residency in Vietnam to enjoy the benefit without actually living in the country, local media reported.
The finance ministry called for the policy to be abolished in August, saying that some car importers have abused it to evade huge taxes. More than 1,000 cars have been imported under the policy, but fewer than 100 are registered under the name of an overseas Vietnamese, it said. Customs agencies found most of the cars imported under the policy are new and luxury cars.
