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Should imported vehicles remain tax free for expats?

Update: October, 04/2013 - 10:24
Last week, Viet Nam News asked readers whether they think the country should continue allowing imported cars and motorbikes to enter the country as expatriate assets.

Currently, every expatriate bringing a car back to the country is exempt from both import tax and the VAT.

Here are some responses.

Andrew Burden, Canadian, Ha Noi

As long as a Viet Kieu (overseas Vietnamese)-imported car can pass a roadworthy safety test, I see no reason why it should not be imported, providing the owner can demonstrate legal ownership.

As Viet Nam continues growing its economy with foreign direct investment and encourages tourism via Southeast Asian visa integration, why not bring more hard currency and cold-hard steel in the form of consumer goods? Tax the car, register the car and insure the car.

The return of overseas Vietnamese brings in a whole new set of concerns and potential conflict. You need to be careful not to swamp the local market, but if richer, more independent and successful ‘foreign' Vietnamese in fancy sports cars means safer handling and higher standards, then what has Viet Nam got to lose?

Ngo Hai Yen, Vietnamese

In my opinion, the entrance of imported cars or motorbikes to our country as expatriate assets poses no problems. However, we should manage our custom regulations well to prevent people from avoiding taxes. If the overseas Vietnamese want to sell their assets, the buyers must pay taxes for the imported cars or motorbikes.

Sugeng Riyadi, Indonesian, Jakarta

I think the influx of imported luxury vehicles should be well and strictly regulated. One of the best ways to do it is to make sure that government sets high taxes and applies them strictly.

Then, the amount of money which is collected can be used in return to finance publicly-needed projects such as building cheap and convenient mass transportation.

Strong control is necessary though, especially to make sure that big cities won't be flooded with more cars or motorcycles, especially the imported and luxury ones which can potentially trigger new problems such as creating social jealousy.

Many big cities, like Jakarta in my own country, have such problems.

Until now, we are still experiencing heavy traffic problems every single day since there are too many private cars and motorcycles, many of them luxurious.

At the same time, Jakarta is not supported with an adequate mass transport infrastructure to provide cheap and comfortable ways of travelling, so middle to low income people instead choose to buy motorcycles for their daily transportation.

The result is "hellish" daily traffic in Jakarta, which also boosts extremely high consumption of gasoline subsidised by the government.

Jackie Voglt, American, Bangkok, Thailand

Learn a lesson from Bangkok, which experiences horrible traffic congestion (all cars) at almost any time of day. One thing I and others who come to Viet Nam for several days at a time feel is that while motorbikes are scary, the lack of cars (compared with other major hubs in Southeast Asia) contributes to the uniqueness of Vietnamese cities.

However, last time I came I was amazed at seeing more Ferraris and BMWs, knowing that the average office worker only makes a couple of hundred dollars a month. Where do people get the money to buy these luxury vehicles?

I guess the preferential tax policies for overseas Vietnamese aims at encouraging them to return home and invest. But as with any regulation, when you try to loosen it there could be holes that people can take advantage of. You need to have a specialised customs department dealing with these types of tax evasions.

Allowing an influx of imported cars here obviously could have consequences on traffic congestion and hurt the local industry. Authorities must find the right balance.

Jerome Vallete, French, Nha Trang

I don't really know the situation with overseas Vietnamese, but for the expats who live here permanently I feel there's no need to import a car to the country.

It's probably more cost-efficient to purchase one directly here once you have settled.

However, if Viet Nam wants to continue having a preferential tax policy for overseas Vietnamese, one could provide fake documents to import the car under the overseas Vietnamese's paperwork and resell within the country.

Viet Nam's wage disparity is more evident than China's. When I was in HCM City recently, I saw more Bentley Flying Spur's in one day than I'll see in Lyon in a year.

I'd say 90 per cent of local vehicles are motorbikes, 7 per cent are commercial vehicles and taxis, and 3 per cent are private cars.

But of that 3 per cent, I estimate maybe a third are luxury brands, a far larger proportion than a typical American or Canadian major city. Amazing. — VNS



 


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