Calculation of special consumption tax and tax for automobile spare parts to be adjusted

In the context of reducing import duty, Ministry of Industry and Trade are suggest many solutions for supporting domestic car production. Photo: Nguyễn Hà

Accordingly, the first solution is to create a market for domestic automobile manufacturers on the basis of encouraging the use of cars produced domestically, to protect the car market.

A representative of the Ministry of Industry and Trade said that the related authorities will research to propose many reasonable solutions for market protection via technical barriers, anti-commercial fraud such as declared tax price, cheat on C/O to enjoy preferential tariffs.

To ensure fair competition between imported cars and domestic cars, there will a binding mechanism about responsibility of the subject who imports car for consumption. It is similar to domestic cars.

The second solution group is focusing on supporting manufacturers in order to reduce product costs and improve competitiveness.

Accordingly, they will consider issuing standards and codes for components, spare parts and harmonized all standards. For import tariff for components and spare parts, they will also research to adjust tax in accordance to the principle of less than imported tariff for finished automobiles.

Furthermore, the Ministry of Industry and Trade will coordinate with the Ministry of Finance to research about the applicability of special consumption tax on cars that have a high rate of localization. It means that there is no excise tax on the value created in the country. This solution aims to improve the competitiveness of manufactured and assembled products domestically as well as encourage car manufacturers to raise the localization ratio.

The third solution is to focus on developing supporting industries by suggesting the automobile manufacturers collaborate with local companies to produce parts and components domestically.

At the same time, facilitate domestic enterprises supporting industry to produce components and spare parts through the Supportive Industrial Development Program .

In 2017, automobile import tariffs in the region fell in accordance to the signed roadmap. Many automobile manufacturers now tend to reduce domestic car production and switch to imported cars. The proposal of supportive solutions for domestic car production of The Ministry of Industry and Trade is considered essential, but it is quite slow. Currently, time for manufacturers to rise up to compete with imported products is rare while import tariff is reduce to 0% in 2018.

Therefore, along with finding effective solutions, many enterprises are expecting those solutions will be put into execution as soon as possible.