Reduction in import tax on auto spare parts likely
Import tax on auto parts and components may be down to zero per cent next year, two years before schedule in 2018, under the ASEAN Free Trade Agreement (FTA).
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| Under the itinerary, the import tax on completely built-up units from ASEAN will be zero per cent by 2018, so that the number of cars from this region to Viet Nam will significantly increase. — Photo soha.vn |
This is a key part of the finance ministry's proposal being sent to relevant ministries and sectors to get their opinion with regard to the reduction of import tax on parts and components for many models of cars. It aims to support the development of the domestic automobile industry.
Under the itinerary, the import tax on completely built-up units from ASEAN will be zero per cent by 2018, so that the number of cars from this region to Viet Nam will significantly increase.
As for vehicles with engine displacement of 2,000cc and below, the finance ministry proposed to reduce tax on seven parts of the engine group and other components such as gear-box, car cigarette lighter, auto wheel and rim.
In concrete terms, the import tax on auto engines from South Korea, which is not an ASEAN member, will be reduced from 20 per cent to 3 per cent in 2016 – equal to the level that Viet Nam has committed in the Viet Nam – Japan FTA.
Tax on gear-box, wheels and rims was proposed to be decreased to 5 per cent, while car cigarette lighters were to be zero per cent by next year.
As for trucks, the ministry proposed to cut import tax on the gear-box and its accessories from South Korea and Japan by zero per cent by 2016 – equal to that committed to ASEAN members – replacing the set plan of 2018 and 2019.
Meanwhile, import tax for auto parts from China will be zero per cent by 2018.
The ministry said that the cut on import tax on a number of auto parts and components would not much affect the State budget because the money collection was expected to increase from the development of the domestic auto assembling and production industry.
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| Import tax on auto space parts may be cut to zero per cent next year. — Photo tractorautoparts.com |
This proposal is one of many by the finance ministry to support the domestic automobile industry. Earlier, the ministry proposed to adjust the calculation of special consumption tax on imported cars.
In addition, tariffs on cars with an engine displacement of below 3,000cc would be removed in the 13th year after the Trans-Pacific Partnership (TPP) agreement comes into effect. Meanwhile, tariffs on cars with displacement of 3,000cc and above would be lifted in the 10th year.
Laos removes automobile import duties
Laos has recently removed import tariffs on automobiles, part of its measures to lift trade barriers before the ASEAN Economic Community is formed later this year.
Laos began to reduce duties on imported goods from 2008, Deputy Director General of the Lao Foreign Trade Policy Department Saysana Sayankone said, noting that a number of them, including those on automobiles, have been cut down to zero percent.
He said like many other countries, Laos considers import tariffs as a trade barrier to protect domestically produced goods. Import taxes are also a major source of income for Laos as they account for 11 percent of the country's budget revenue.
However, the country has levied consumption taxes and revenue from them is enough to replace auto import duties.
Although automobile prices are forecast to decline the near future, they will still be higher than those in many other nations due to high demand and few competitiveness in the market, he noted. — VNS
