From 2019, the vehicle registration tax for pickup trucks in Vietnam saw a significant increase, causing concern for many businesses and consumers. This adjustment has strongly impacted the automotive market, especially the pickup truck segment, which is popular for its versatility and good performance.
Ford Ranger Wildtrak pickup truck and vehicle tax
Increased Vehicle Registration Tax Rates for Pickup Trucks in 2019
Before 2019, the vehicle registration tax for pickup trucks was only 2%, significantly lower than the 10-12% applied to passenger cars. However, from 2019, the government decided to increase the vehicle registration tax for pickup trucks to 60% of the tax rate for passenger cars.
Specifically, if the vehicle is registered in Hanoi, the registration tax would be 60% of 12%, equivalent to 7.2% of the vehicle’s value. In other provinces and cities, this rate is 6% of the vehicle’s value. This means that the vehicle registration tax for pickup trucks has increased 5-6 times compared to before.
Reasons for the Pickup Truck Tax Increase
The increase in vehicle registration tax for pickup trucks is believed to aim at reducing import surplus and encouraging domestic production. Most pickup trucks in Vietnam are imported completely built-up (CBU), putting pressure on the trade balance. Additionally, the fact that pickup trucks enjoyed lower taxes than passenger cars while having many equivalent features was also considered one of the reasons for this adjustment.
Ford Ranger Wildtrak affected by vehicle tax increase
Impacts of the Tax Increase
The increase in vehicle registration tax for pickup trucks has significantly increased the selling price of this vehicle type, affecting consumer purchasing power. Many pickup truck businesses have also expressed concerns about declining sales. In particular, automakers mainly dealing in imported pickup trucks like Ford Vietnam with the Ranger model will be heavily impacted.
Conclusion
The increase in vehicle registration tax for pickup trucks in 2019 is a major change in tax policy for the automotive industry. This sharp increase has had and continues to have a significant impact on the pickup truck market, causing vehicle prices to rise and sales potentially to decline. However, it also presents an opportunity to promote domestic automobile production and reduce import surplus.
