HANOI: Vietnam’s Ministry of Finance has drafted a plan to increase the special consumption tax (SCT) on imported cars by changing the basis on which the tax is calculated.
The new calculation method is expected to cause an average five percent rise in imported car prices. Domestic sale fees, which cover the cost of services such as advertising, displays, transportation, and warranties, will be added to the total value of cost, insurance, freight, and import tariff costs that currently forms the SCT’s taxable basis.
According to the Ministry, the current methodology for calculating SCT on imported cars has created competitive advantages for importers.
The current SCT rates on cars with fewer than nine seats range from 45 percent to 60 percent, depending on engine capacity.
The Ministry invited has stakeholders to give their opinion on the draft plan. The final version is expected to be submitted to the Prime Minister for approval next month and the plans would be effective from January 1, 2016.
