Proposed adjustments to import taxes and fees for pickup trucks, aligning them with passenger cars, could significantly increase vehicle prices if approved.
The Ministry of Industry and Trade’s proposal to apply taxes and fees to imported pickup trucks equivalent to those for passenger cars with fewer than 9 seats is sparking considerable debate. This proposal, if approved by the Government and the National Assembly, would significantly impact the pickup truck import tax rates and the selling prices of these vehicles in the Vietnamese market.
Impact of Proposed Adjustments to Pickup Truck Import Tax Rates
Currently, the pickup truck import tax rates stipulate an import tax of only 5%. The special consumption tax applied to vehicles with engine capacities under 2.5 liters is 15%, from 2.5 to 3 liters is 20%, and over 3 liters is 25%. The registration fee is 2%.
However, if taxes and fees are applied as they are for cars with fewer than 9 seats, the pickup truck import tax rates will change significantly, with tax and fee levels increasing many times over. Specifically:
- Import taxes could increase substantially.
- Special consumption tax could rise to levels equivalent to passenger cars.
- Registration fees could increase.
With the proposed tax levels, pickup truck prices are expected to increase sharply compared to current levels, by approximately 400 million VND. Particularly for pickup truck models with large engine capacities (up to 4.0 liters), selling prices could double compared to present prices.
Pickup Truck Import Tax Rates in the Context of Integration
Since 2018, vehicles originating from ASEAN countries have enjoyed a 0% import tax rate. Some models with engine capacities under 2.0 liters have benefited from a 5% reduction in special consumption tax compared to 2017, while those over 2.0 liters have seen increases of 5-20%. However, pickup truck prices at that time were still about 30-50% higher than they are currently.
Objectives of the Proposed Adjustment to Pickup Truck Import Tax Rates
The Ministry of Industry and Trade’s proposal to adjust pickup truck import tax rates aims to develop the domestic automobile industry. Previously, in 2015, the Ministry of Finance had proposed applying a special consumption tax rate equal to 60% of the rate applied to vehicles with 9 seats or fewer with the same engine capacity. However, this proposal was not approved.
Pickup Truck Market in Vietnam
Thanks to preferential tax rates, the pickup truck segment has grown strongly in the Vietnamese market in recent years. Statistics show a sharp increase in imported pickup truck volume over the years, from 2,600 units in 2010 to 29,900 units in 2016. The majority of imported pickup trucks originate from Thailand.
Conclusion
The proposed changes to pickup truck import tax rates could significantly impact the pickup truck market in Vietnam. Increased taxes and fees could lead to a sharp rise in pickup truck prices, affecting consumer purchasing power. However, this is also seen as a measure to promote the development of the domestic automobile industry.
