From April 10, 2019, Decree 20/2019/ND-CP on registration tax rates officially took effect. Accordingly, the first-time registration tax for pickup trucks and vans in Lao Cai increased threefold compared to before. This has increased the cost of ownership for these vehicles by 18 million to 62 million VND. So what is the current registration tax rate for pickup trucks in Lao Cai? The article below will provide detailed information on this issue.
Steep Increase in Pickup Truck Registration Tax in Lao Cai
Decree 20/2019/ND-CP stipulates that cars that carry both people and goods (pickup trucks) with a permissible payload of less than 1,500 kg and with 5 seats or less, and vans with a permissible payload of less than 1,500 kg must pay the first-time registration fee equal to 60% of the first-time registration fee rate for passenger cars with 9 seats or less. The second and subsequent registration tax rates still apply a rate of 2% nationwide.
Specifically, previously, the pickup truck registration tax rate in Lao Cai was 2%. With the new Decree, this tax rate increased to 6%, which is 3 times higher. In Hanoi, the pickup truck registration tax rate is 7.2% because the registration tax for passenger cars with 9 seats or less is currently applied at 12%.
Ford Ranger pickup truck
A Ford Ranger model. Photo: ford.co.uk
Impact of Registration Tax Increase on Vehicle Ownership Costs
The increase in pickup truck registration tax has significantly increased the cost of ownership for this vehicle line. With selling prices ranging from 460 million to 1.198 billion VND, the cost of ownership for pickup trucks after the tax increase will increase by an additional 27.6 million to over 86 million VND, depending on the locality, vehicle model and version. Compared to the previous 2% tax rate, the price of a pickup truck when registered differs from nearly 18 million to 62 million VND.
For example, customers who buy a UAZ Hunter (the cheapest pickup truck model) will have to spend nearly 18 million VND more on registration tax. Meanwhile, people who buy a Ford Ranger Raptor (the model with the highest selling price) will have to spend up to 62 million VND more. For popular models priced from 600 million to over 900 million VND, the increase in registration tax also ranges from tens of millions of VND.
Pickup Truck Market Situation in Lao Cai After the Tax Increase
Records at car registration points in Lao Cai on the first day of applying the new Decree showed that the number of customers buying pickup trucks to transact was almost non-existent. According to officials receiving and processing car registration documents, the number of customers coming to carry out pickup truck registration procedures on April 10 was mainly for other car lines.
One reason is that people rushed to buy cars before the Decree took effect in order to “run tax”. In addition, the large and bulky size of pickup trucks is also a factor that makes many people hesitate when traveling on narrow roads and alleys in urban areas.
Conclusion
The increase in pickup truck registration tax in Lao Cai according to Decree 20/2019/ND-CP has significantly impacted vehicle ownership costs and the pickup truck market. Although the tax increase is not small, many experts believe that the demand for pickup trucks will not decrease significantly due to the convenience and cargo-carrying capabilities of this vehicle line.
