Car owners will be bent with taxes and fees

23-Mar-2012 Intellasia | VietNamNet | Thoi bao Kinh te Vietnam | 7:01 AM Print This Post

It is estimated that when the new tax and fee regulations take effect, the total sum of money every Vietnamese person has to pay to possess a car would be 2.5 times higher than in the US.

With more and more kinds of taxes and fees, the dream of owning cars by Vietnamese people is getting further away. In the time to come, if the three kinds of taxes and fees are applied, every individual and business in big cities would have to bear 10 different kinds of taxes and fees.

On March 13, 2012, the government promulgated the Decree No. 18/2012 stipulating the establishment of the road maintenance fund. The government assigned the Ministry of Finance to set up the fees for using roads which will be imposed annually on every vehicle.

Regarding the kind of fee, the Ministry of Transport has suggested the fees of between 180,000 dong and 1.44 million dong a month for 7 different car groups. Do Van Quoc, director of the Finance Department of the ministry, said that the Ministries of Transport and Finance would compile a circular, stipulating the fees and the way of collecting them.

It is expected that the circular would by released in April, so that the vehicle owners would begin paying fees from June 1.

Prior to that, the Ministry of Transport proposed to collect a new kind of fee – vehicle circulation fee – estimated to be at 20-50 million dong on every vehicle per annum. Besides, the cars entering the central areas of big cities (Hanoi, HCM City, Da Nang, Can Tho and Hai Phong) in peak hours would have to bear another kind of fee.

If all the three kinds of fees are applied, every car, no matter if it is in circulation or in garage, would bear 8 kinds of fees and surcharges in total. The cars entering the central areas of big cities would have to bear 9 kinds of fees.

Car buyers will not only bear more kinds of fees, but higher tax and fees as well. The car ownership registration tax has been raised from 12 percent to 20 percent in Hanoi and from 10 percent to 15 percent in HCM City, while the fee for car number plates has been raised from 2 million dong to 20 million dong.

As such, if counting on the three kinds of taxes calculated on the import prices, including the import tax (on complete built unit cars and CKD – complete knocked down), luxury tax and VAT, the total number of tax and fee types would be 11 or 12.

An expert has said that the total sum of money a Vietnamese person has to spend to “feed” his car would be 2.5 times higher than in the US, the country with the income per capita tens of times higher than Vietnam.

For example, a person residing in Hoan Kiem district in the central area of Hanoi, if owing a Toyota Camry 2.5 imported from the US, with the taxable price of 5,000 dollars, would have to pay the taxes and fees as follows: 20,750 dollars in import tax (CBU cars), 22,875 dollars in luxury tax and 6800 dollars in VAT. As such, the price of the car the buyer has to pay is 75,500 dollars in total.

After that, he would have to pay 15,000 dollars in car ownership registration tax, 20 million dong (1000 dollars) to get a car number plate, and 5.4 million dong for the first-time registration fee. If converting the sums of money into dong, the sum of money he has to pay would exceed 1.9 billion dong.

However, these are just the “basic fees” which give the car owners the right to put their cars into circulation.

And from June 1, with the new three types of fees, the Camry would bear a series of expenses more. Every year, he would pay 2.16 million dong in the road maintenance fee, 30 million dong in circulation fee.

 


Category: Legal

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