The Ministry of Finance did not agree to the request to reduce import tariffs of electric cars because it affects domestic electric car production and reduces budget revenues.

The Ministry of Finance has officially rejected the proposal to reduce import tax on electric cars of TMT Automobile Joint Stock Company and the Vietnam Association of Mechanical Enterprises. TMT is currently cooperating with SAIC-GM-Wuling Automobile (SGMW) joint venture to assemble a Wuling-branded Chinese electric vehicle in Vietnam.

Specifically, in the Government Submission No. 273/TTr-BTC dated 16/11/2022 on the draft Decree on Export Tariff, Preferential Import Tariff, etc., the Ministry advised the Government not to approve the policy of reducing preferential import tax for electric cars. Vietnam currently has many preferential policies on taxes as well as registration fees to promote the development of the green car industry and encourage people to consume eco-friendly products.

For example, preferential tax rate of 0% for importing components for manufacturing and assembling electric cars; adjusting the Excise Tax, strong incentives for battery electric vehicles are 1%, 2% and 3% in the period from March 1^st, 2022, to February 8^th, 2027, and 5-15% from March 1^st, 2027, onwards. Meanwhile, the SCT rate for fossil fuel vehicles is from 15 to 150%, depending on capacity and number of seats.

On the consumer side, the Government applies a preferential policy of registration fee of 0 VND within 3 years from March 1^{st, 2022,} and reduced by 50% in the next 2 years.

Moreover, the reduction of preferential import duties for General Electric vehicles will reduce the competitiveness of domestically produced electric cars, not only affecting the State budget revenue, but also increasing pressure on transport infrastructure.

Notably, the proposal not to reduce the import tax on electric cars into Vietnam by the Ministry of Finance was also approved by Deputy Prime Minister Le Minh Khai at the end of December 2022.

From the above fact, the Ministry of Finance has officially informed refusing to the proposal to reduce the preferential tax on electric car imports to 0% for a period of 2 years (from January 1^st to December 31^st  2024) that TMT Company, a unit in cooperation with SAIC-GM-Wuling Automobile (SGMW) joint venture to assemble electric cars under the Wuling brand (China) in Vietnam and the Business Association Vietnam Mechanical Engineering (VAMI) submitted earlier. Concurrently, this unit is required to continue to implement preferential import tax policies for cars using electric motors in accordance with current regulations.

Source: autobikes.vn