HÀ NỘI – The Ministry of Finance (MoF) said continuing to reduce auto registration fees by 50 per cent for domestically assembled cars is not appropriate as the national economy is recovering.
Last year, the COVID-19 pandemic heavily burdened businesses and workers, leading to a severe decrease in auto consumption.
As a result, the Ministry of Finance drafted Decree 103 to implement a 50 per cent registration fee cut for domestically-manufactured and assembled cars to support businesses affected by COVID-19 and stimulate local auto consumption.
Decree 103 was enacted by the Government and took effect from December 1, 2021.
Since the decree came into effect, automobile sales strongly rebounded. Automobile sales in the country posted a month-on-month increase of 20 per cent and a year-on-year surge of 88 per cent in July, the Vietnam Automobile Manufacturers' Association (VAMA) reported on August 11.
The results show a strong rebound in the Vietnamese automobile market, although the 50 per cent registration fee reduction ended in May 2022.
VAMA has announced that the total sale by its members reached 30,254 vehicles in the month. The sale of passenger and commercial vehicles expanded by 30 per cent and 1.8 per cent, respectively. Special-purpose vehicles decreased by 57 per cent compared to the previous month.
During the January – July period, VAMA's members sold 232,094 vehicles, up 39 per cent year-on-year.
Among the non-VAMA members, TC Motor supplied 5,792 vehicles to the market in July, lifting its total sale in the first seven months of this year to 42,189 units. Meanwhile, VinFast sold 16,832 automobiles during January – July.
Hyundai topped the list of sellers in July with 5,792 units. Toyota Vietnam, Mitsubishi Vietnam, Kia Vietnam and VinFast had 5,565, 4,245, 4,039 and 2,137 units, respectively.
After Decree 103 expired on May 31, 2022, many suggested that the Ministry of Finance should consider keeping the reduction of registration fees for domestically-manufactured and assembled cars until December 31, 2022.
The Ministry then reported to the Government the decree's positive and negative impacts. It said Việt Nam might face the risk of being accused of breaching the General Agreement on Tariffs and Trade (GATT) under the WTO and, therefore, may be requested an explanation from countries not having automobile production and assembly activities in Việt Nam.
The MoF notes that this was a short-term measure only to help remove burdens for the domestic car manufacturing industry affected by the COVID-19 pandemic.
Insiders say with the gradual stabilisation of the global economic and political situation, and the stable supply of spare parts and accessories for domestic vehicle assembling, the automobile supply and market will be further improved in the coming time. They further say COVID-19 has been under control, and socio-economic development is gradually returning to normal, including the automobile manufacturing industry.
Therefore, the Ministry does not want to keep reducing car registration fees until December 31, 2022, noting that it is not appropriate at present. - VNS