Pickup trucks are increasingly popular in Vietnam, not only for their versatility and power but also for favorable tax policies that make them more affordable. However, a recent proposal to increase taxes and fees on imported pickup trucks has caused public concern, raising worries that prices could rise significantly. So, what’s happening with pickup truck import taxes, and how will these changes affect the market?
Proposed Increase in Pickup Truck Import Tax: Details from the Ministry of Industry and Trade
The Ministry of Industry and Trade recently submitted a report on the development strategy of the automotive industry, notably including a proposal to adjust the tax policy for pickup trucks. Specifically, the regulatory agency recommends that the Government and National Assembly consider applying the special consumption tax rate and import tax rate for pickup trucks with a payload of less than 1,500 kg and 5 seats or less, equivalent to passenger cars with fewer than 9 seats. At the same time, a proposal to increase registration fees for this vehicle line has also been put forward.
Currently, imported pickup trucks enjoy a preferential import tax rate of only 5%. In addition, the special consumption tax also applies according to engine displacement, with a rate of 15% for vehicles under 2.5 liters, 20% for vehicles between 2.5-3 liters, and 25% for vehicles over 3 liters. The current registration fee for pickup trucks is 2%.
Ford Ranger pickup truck, a popular model in Vietnam, directly affected by import tax changes.
If the new proposal is approved, the taxes and fees that pickup trucks have to bear will increase significantly, equivalent to passenger cars. This stems from the goal of promoting the domestic automotive industry, creating a more level playing field between imported and domestically assembled vehicles.
Direct Impact on Pickup Truck Prices and the Vietnamese Market
Increasing import taxes and other fees will undoubtedly push up the price of pickup trucks. According to estimates, if the proposal is approved, pickup truck prices could increase sharply, expected from around VND 400 million upwards compared to current prices. For imported completely built-up (CBU) pickup trucks with large engine displacements, the price increase could even reach billions of VND.
This will have a significant impact on the Vietnamese pickup truck market. Consumers will have to consider more carefully when choosing to buy a car, and may switch to other vehicle segments or domestically assembled pickup truck models to save costs. Sales of imported pickup trucks may decline, while domestic manufacturers and assemblers may benefit from this policy.
History of Pickup Truck Taxes and Market Development
In fact, this is not the first time there has been a proposal to increase taxes on pickup trucks. In 2015, the Ministry of Finance also proposed applying a special consumption tax equal to 60% of that of passenger cars with the same engine displacement. However, this proposal was not approved, and the import tax on pickup trucks from ASEAN countries remained at 5%.
The preferential tax policy has created conditions for the pickup truck segment to develop strongly in Vietnam in recent years. Statistics from the General Department of Customs show that the volume of imported pickup trucks has grown impressively. If in 2010, Vietnam only imported about 2,600 pickup trucks, by 2016 this number had increased to nearly 30,000, more than 11 times. The trend of importing pickup trucks continued to increase in the following years, mainly from Thailand, a country with advantages in manufacturing and exporting pickup trucks in the ASEAN region.
Thailand is the main source of imported pickup trucks for the Vietnamese market, benefiting from a 0% import tax under the ASEAN trade agreement.
Changing Tax Policies: Which Direction for the Pickup Truck Market?
The Ministry of Industry and Trade’s proposal to increase pickup truck taxes stems from the long-term goal of developing the domestic automotive industry, encouraging domestic automobile production and assembly. However, changes to tax policies need to be considered comprehensively, ensuring a balance between the goal of industry development and the rights of consumers.
If import taxes on pickup trucks increase sharply, the market may witness major adjustments. Importers and distributors of pickup trucks will have to have new business strategies to adapt to the situation. Consumers also need to prepare for the possibility of increased car prices and make purchasing choices that are more suitable for their budgets and needs.
Conclusion:
The proposal to increase import taxes on pickup trucks is an important piece of information that could create significant changes for the Vietnamese automobile market in the near future. Whether this policy is approved and what the actual impact will be remains a question that needs time to answer. However, it is certain that the issue of import taxes on pickup trucks will continue to be a hot topic, attracting the attention of consumers, businesses, and managers in the automotive industry.
