Registration fees for electric cars cut by half: MoF

August, 14/2021 - 07:19
Registration fees for new electric cars are to be cut by half compared to those with internal combustion engines, following recommendations by the Ministry of Finance (MoF). 

 

A rendered image of VinFast's VF e34. The Vietnamese electric car maker has called for cuts in special consumption tax and registration fee for electric cars to boost domestic demand. — VNA/VNS Photo

HÀ NỘI — Registration fees for new electric cars are to be cut by half compared to those with internal combustion engines, following recommendations by the Ministry of Finance (MoF). 

It is hoped the reduced fee will encourage more consumers to go electric, a growing trend around the world, as part of the country's effort to combat pollution and be more environmentally friendly. 

The registration reductions mean that owners of, for example, VinFast's new model VF e34 with a retail price tag of VNĐ690 million (US$30,000) will pay VNĐ35-40 million (depending on where they register the vehicle) instead of VNĐ70-80 million. 

The fee reduction will be in effect for five years. 

The drop in fees will see a reduction in government coffers of around VNĐ5 trillion as car registration fees make up a significant portion of income for provinces and cities. Registration fees for cars accounted for 69 per cent of the total registration fee for all vehicles in 2017, 70 per cent in 2018, 74.6 per cent in 2019 and 79 per cent in 2020. 

The fee reduction will not apply to owners of used electric cars, who will have to pay around 2 per cent of the vehicle's price tag, minus depreciation. 

The country's largest conglomerate and sole electric vehicle maker VinGroup has asked the Government to grant special consumption tax cuts and registration fee reductions for electric cars. The group also produces cars with internal combustion engines and electric bikes. 

Multiple ministries have voiced support for the proposal. 

Deputy minister of transport Lê Đình Thọ said the switch to electric vehicles would help reduce the country's carbon emissions in line with international environment and climate change agreements. 

Regarding the cuts in special consumption tax, also for a period of five years, the Ministry of Finance said this matter must be decided by the National Assembly. For the cuts to be even considered, the National Assembly must be willing to make modifications to the country's Laws on Special Consumption Tax, which unlike registration fees do not fall under the Government's discretion. 

Right now, the special consumption tax for electric cars is at 15 per cent for vehicles with nine seats or fewer, 10 per cent for 10-16 seaters and 5 per cent for 16-25 seaters. 

During the first seven months of 2021, more than 185,000 cars were produced or assembled in Việt Nam, a 40 per cent increase from the same period last year. On average, 838 new cars are sold every day nationwide. — VNS

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