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Vietnam considers new tax on pickups

Aug 17. 2017
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By Viet Nam News
Asia News Network
Hanoi

2,740 Viewed

Vietnam’s Finance Ministry has proposed a new tax on pickups, which would sharply increase their cost.

The ministry has proposed that the government apply a special consumption tax on pickups to be set at 60 per cent of the tax on cars with nine seats or less with similar engine displacement.

Speaking at a press conference in Hanoi yesterday, Pham Dinh Thi, head of the ministry’s Tax Policy Department, said pickups mainly have engine displacement of between 2,000 and 3,000cc, so if the tax on the car with nine seats and less is currently 55 per cent of the car value, the tax on the pickups should be 33 per cent.

The proposal was made after the prime minister required the ministry to study and check the tax on pickups in the region. The ministry found that regional countries usually levy special consumption tax on pickups lower than that of autos with nine seats or less.

According to the Law on Special Consumption Tax regulations, a special consumption tax of 15 per cent is levied on pickup trucks with engine displacement of 2,500cc or less, 20 per cent for those with over 2,500cc-3,000cc and 25 per cent for those with over 3,000cc.

In recent years, the number of pickups has sharply increased in Vietnam, the majority imported. In 2012, 3,291 units were sold, of which 3,252 were imported and 39 units were locally assembled. In 2016, sales soared to 28,233 units, of which 27,265 units were imported and 968 units were locally-assembled.

Thi said the five-seat pickups had for many years enjoyed special consumption tax lower than that of vehicles with the same number of seats (lower than SUV models, with engine displacement from over 2,500cc to 3,000cc, taxed 55 per cent). Therefore, the number of consumers moving to buy pickups instead of SUVs has been seen increasing rapidly.

If the finance ministry’s proposal is approved by the government and the National Assembly, the average special consumption tax on pickups will increase by 50 to 100 per cent.

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