The Ministry of Finance proposes adjusting truck import taxes to encourage domestic enterprises to invest in production and consumption of domestic products. This proposal focuses on specialized trucks with lower tax rates than WTO commitments.
Draft Decree Amending Truck Import Taxes
According to the draft Decree amending and supplementing Decree 125/2017/ND-CP, the Government is considering adjusting the import tax rates for certain types of specialized trucks. Specifically, vehicles such as refrigerated trucks, waste collection trucks with waste compactors, tanker trucks, cement trucks, and sludge trucks with detachable lifting bodies under 45 tons will have their tax rates increased from 20% to 25%. This new tax rate remains within the scope of WTO commitments.
Enterprise Proposals and Ministry of Finance Opinions
Many domestic truck manufacturers have proposed increasing import taxes on completely built-up (CBU) trucks from 5 tons to under 45 tons and specialized vehicles to 40%, equivalent to other countries in the region. However, the Ministry of Finance believes that, according to Decree 125/2017/ND-CP, dump trucks are already subject to tax rates from 10-50% depending on their designed total weight and WTO commitments. Therefore, there is no need to adjust the tax rate for this item.
For trucks with specialized design components from 5 tons to under 45 tons under group 8704 (including refrigerated trucks, waste collection trucks, tanker trucks, cement trucks, sludge trucks), the current tax rate is 20%. The WTO commitment for these vehicles ranges from 20% to 70% depending on the vehicle type and weight.
Promoting Domestic Production
Currently, domestic enterprises have invested in production lines for assembling medium-sized, heavy-duty, and specialized trucks with a capacity three times the market demand, reaching 45,000 vehicles of all types. Meanwhile, truck import tax rates in regional countries such as Thailand and Malaysia are higher, ranging from 40-60%. Adjusting truck import tax rates to 25% is expected to boost domestic production, reduce imports, and enhance competition.
Concrete Mixer Trucks
For concrete mixer trucks (HS code 8705.40.00), the MFN tax rate is 15%, the WTO commitment is 20%, and ACFTA and AKFTA are 0%. Import turnover in 2017 reached $119 million with 2,722 vehicles, mainly from China and Korea. The Ministry of Finance proposes increasing the tax rate to 20% to encourage domestic production.
Conclusion
Adjusting truck import taxes is a necessary measure to protect and develop the domestic automobile industry. By increasing import tax rates on certain types of specialized trucks, the Government hopes to create favorable conditions for Vietnamese businesses to compete, while promoting economic growth.
(Source: Chinhphu.vn)
