Import tax on cars running on compressed natural gas

Buses running on compressed natural gas (CNG) have a current preferential import tax rate of 70%.

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The Ministry of Finance has just issued a document responding to the proposal of the People's Committee of Binh Duong province on exempting import tax on buses running on CNG (compressed natural gas) to serve the implementation of the new urban public transport project in this locality.

Accordingly, the Ministry of Finance does not exempt import tax on CNG buses. According to current regulations, CNG buses belong to group 87.02, with a preferential import tax rate of 70%, import tax under free trade agreements (FTA) in Asean - Japan 5%, Asean Vietnam - Japan 5%, Asean Trade in Goods Agreement (ATIGA) 60%.

According to the Ministry of Finance, the current law on export and import taxes only stipulates the exemption of import tax for specialized means of transport in technological lines that cannot be produced domestically and are imported to create fixed assets for investment incentive projects. Accordingly, the above imported buses running on CNG are not subject to import tax exemption.

The Ministry of Finance also believes that the proposal to exempt import tax on CNG buses by the People's Committee of Binh Duong province is unreasonable, because buses with more than 30 seats are a type of vehicle that can be produced domestically, with high capacity and localization rate. CNG buses are only different from regular buses in terms of CNG engines.

Previously, the People's Committee of Binh Duong province issued Official Letter No. 2371/UBND-KTN dated August 14, 2013 to the Prime Minister and the Ministry of Finance requesting exemption of import tax on 36 CNG buses to serve the implementation of the public transport project in Binh Duong New City using new means of transport.

The Ministry of Finance believes that the exemption of import tax for 36 CNG buses in Binh Duong will set a bad precedent for other businesses and localities in arbitrarily requesting tax exemptions and could affect the goal of producing CNG buses domestically as well as the possibility of fraud with other conventional buses when importing.

Therefore, the Ministry of Finance requested the People's Committee of Binh Duong province to direct relevant units to fulfill tax payment obligations for the above 36 buses according to current law./.

According to vov.vn - LT