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Luxury car demand to climb on consumption tax increase

Update: October, 19/2015 - 08:10

The vehicles with engine displacement of more than 6,000cu.m will see the highest tax increase of up to 150 per cent from its current tax rate of 60 per cent. — Photo dantri

HA NOI (VNS) — The demand for luxury cars could steadily increase after the Government recently proposed raising special consumption tax on cars, particularly luxury vehicles.

Under the proposal, vehicles with an engine displacement of 3,000cu.m to 4,000cu.m; 4,000cu.m to 5,000cu.m; and 5,000cu.m to 6,000cu.m will see tax increases from 60 per cent to 90 per cent, 60 per cent to 110 per cent, and 60 per cent to 130 per cent, respectively.

In particular, vehicles with engine displacement of more than 6,000cu.m will see the highest tax increase of up to 150 per cent from its current tax rate of 60 per cent.

Meanwhile, the Government has proposed that tax levied on vehicles with engine displacement of under 2,000cu.m should be reduced by between 5 per cent and 25 per cent.

If the proposal is approved by the National Assembly, it would take effect from next July.

Many businesses forecast that the number of imported luxury cars sold from now through the second quarter of next year would steadily increase for fear of an increase in the special consumption tax.

A staff of an automobile showroom in Hoang Mai District, Tran Van Hoan, said the number of customers buying luxury cars would likely increase in the coming months following the Government's proposal to increase special consumption tax.

During the Viet Nam International Motor Show which ended last week in Ha Noi, about 200 car dealership contracts were signed. A majority of vehicles were luxury cars valued at about VND1 billion (US$44,400) each, such as Audi, BMW, Porsche and Land Rover, besides Renault. About 45 Audis, 42 BMWs, 11 Mini Coopers, and six Motorrads, in addition to 25 Renault vehicles, were sold during the show.

A representative from a business, which specialises in supplying luxury cars, told VietnamNet online newspaper that demand for such cars was increasing steadily.

Many customers expressed a special interest in luxury cars at the motor show, he said. They particularly paid attention to the time when cars would be delivered to avoid the tax increase.

According to the Viet Nam Register, there were 572 cars valued between $150,000-300,000, 42 valued between $300,000-500,000, and 4 cars valued at more than $500,000, which were registered in the third quarter of this year. — VNS

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