Excise tax increase: A pickup truck priced at US$44,000 may be added US$23,800
Minh An
September 15, 2017 | 03:06 PM GMT+7
Although car import tax will be reduced, the excise tax is proposed to be highly raised, impeding the free international trade.
High raising of excise tax will result in sharp increase in price of pickup truck. Photo: Capital Youth
Recently, the Ministry of Finance (MoF) has proposed raising excise taxes on pickup trucks. Specifically, the excise tax will be raised by 60% of that imposed on passenger vehicles under 9 seaters with the same cylinder capacity.
At present, the excise taxes imposed on pickup trucks with of cylinder capacity of 2,500cc or less, from 2500cc to 3000cc and over 3,000cc are 15, 20 and 25 per cent respectively.
The current excise taxes imposed on passenger vehicles under 9 seaters with the same cylinder capacity are from 55 to 90 per cent. Thus, the excise taxes imposed on pickup trucks will be raised to from 30 to 54 per cent as proposed by MoF.
Due to increasingly sharp consumption of the pickup trucks in recent years, according to MoF, it is necessary to raise excise taxes to orientate consumption in accordance with international practices and purpose use.
Although it is the proposal made by the MoF, if the proposal is approved, the price of domestic pickup truck may soar hundreds of VND millions compared to current one.
As calculated, if a VND1-billion (equivalent to US$44,000) pickup truck is subject to the current excise tax, the additional tax will be from VND150 to 250 million (roughly US$6,600 to 11,000) depending on the cylinder capacity. However, subject to the MoF’s proposed excise taxes, the additional tax will be raised from 300-540 million (approximately US$13,220 to 23,800). It means that the price of pickup trucks will increase by from 10 to 20 percent compared to the current one.
At the seminar "Suggestions on the draft law amending and supplementing some articles of five tax laws" organized by the Chamber of Commerce and Industry of Vietnam (VCCI), Bui Ngoc Tuan, Deputy General Director of Deloitte Vietnam Company Limited, said that raising excise tax imposed on pickup trucks will impede the free international trade.
In this regard, Toyota Vietnam’s representative also said that based on Toyota Vietnam's statistics, over 70 per cent of customers bought pickup trucks under the names of companies for commercial purposes of transporting passengers and cargo. Therefore, Toyota Vietnam proposed that excise taxes imposed on pickup trucks should not be raised to ensure the enterprises’ business plans and customers’ interests.
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