Cheap car prices, users benefit?

Many people question whether the State budget is expected to delay this collection, benefiting domestic car assemblers and manufacturers, the car market, and whether consumers benefit or not? The answer is very difficult!

Difficult to reduce car prices

In essence, Special Consumption Tax is a form of indirect tax on special and luxury goods in order to direct consumption and limit imports. Enterprises, business organizations stand to collect on behalf of the State, the payer is the end consumer, individual, enterprise.

Moreover, the policy of extending the Special Consumption Tax as proposed by the Ministry of Finance is only temporarily not collected during the tax period, in order to reduce the financial balance pressure on businesses due to the impact of the epidemic, the payment responsibility of enterprises. accumulated at the end of the year. Therefore, in essence, businesses still have to pay tax.

According to financial expert Nguyen Tri Hieu, in essence, the consumption-oriented excise tax is the main thing, in the current Vietnamese context, if any enterprise has a capital market, has a good financial balance, the This tax limitation can create conditions for them to revive cash flow, reduce product prices, and stimulate market demand.

“That is in theory, but in practice, reducing car prices thanks to the extension of the excise tax or not no longer has to wait for the market, on the signal of car manufacturers whether it is for consumers, for the market or not. ?”, said Mr. Hieu.

In fact, VND 20,000 billion The special consumption tax extended for 10 months for domestic car enterprises is basically large for production and business enterprises. However, for automobile manufacturing enterprises, modern and high-tech manufacturing industries, the extension of time for payment of special consumption tax only has a supportive effect, but has not had much effect.

Domestic cars have enjoyed many preferential policies

Since 2017, Vietnam has eliminated import tax on auto components, besides when amending the Law on Special Consumption Tax, domestically produced auto parts are also exempt from excise tax. This is a policy that creates a great basis for reducing car prices in the market, however, car prices in Vietnam are still considered the highest in ASEAN.

The Vietnamese car market has a scale of 350,000 to 450,000 vehicles per year, although it has grown compared to previous years, but the market size is still small. Due to the small scale and high cost, the price of Vietnamese cars is still affordable for the rich or the middle class, while low-income people still cannot afford to buy a car.

From 2017 until now, the import tax on components and complete cars from ASEAN has been abolished in Vietnam, but in fact the price of cars of the same type in Vietnam is usually 200 to 300 million dong higher/unit than in Vietnam. countries like Indonesia, Thailand or Malaysia.

Currently, the Ministry of Industry and Trade has been developing preferential policies for domestic cars in the direction of reducing and exempting special consumption tax for cars manufactured and assembled in the country according to the localization rate; new energy vehicles (electric cars, hydrogen cars..). If these preferential policies are implemented, the price of cars manufactured and assembled in Vietnam will theoretically decrease by 20-40%, corresponding to the cost from the current Special Consumption Tax of 35-150. %/depending on vehicle capacity.