Car import businesses request 50% reduction in registration fees

In order to implement Resolution No. 31/NQ-CP of the Government to solve pressing issues in the automobile industry, the Ministry of Finance is assigned to coordinate with the Ministry of Industry and Trade and relevant agencies, departments and branches to study policies on extending the deadline for paying special consumption tax, preferential tax rates, incentives including registration fees for domestically manufactured and assembled automobiles (CKD) proposed by the Ministry of Industry and Trade, and report to the Prime Minister before March 20, 2023.

Faced with that situation, the Vietnam Automobile Importers Association (VIVA), consisting of 12 member enterprises, has just sent this petition to the Government, the Ministry of Industry and Trade, and the Ministry of Finance.

VIVA member companies (including Audi, Bentley, Ferrari, Jaguar & Land Rover, Maserati, Morgan & Brabus, Porsche, Subaru, Volkswagen and Volvo).

According to VIVA, automobile companies are struggling to cope with high inventories due to a sudden drop in purchasing power in the market. In addition, the difficulty of vehicle inspection in the past two months has caused inventories to increase, putting great financial pressure on companies. VIVA asserted that its 12 member companies are facing a more serious inventory crisis.

VIVA businesses also shared that, due to the number of cars sold and signed contracts decreasing since November 2022, the inventory surplus situation continues to be much more serious for importers and dealers of imported cars.

Specifically, in January 2023, the import of completely built-up cars increased 3 times to 12,842 cars compared to 4,020 cars in January 2021. From October to December 2022, the import of completely built-up cars also increased 3 times, exceeding 77,000 passenger cars compared to 25,700 cars over the same period in 2021.

In particular, the overstock situation is getting worse due to the 2 months of vehicle inspection activities, causing the backlog of inventory from October 2022 to present, causing great financial pressure.

Therefore, VIVA believes that the management agency needs to have a solution to support fairness between imported and domestically assembled vehicles. VIVA said it supports a 50% reduction in registration fees, but only if the reduction applies to both types of vehicles.

Domestically produced cars have had their fees reduced by 50% twice in the past three years, while imported cars have not enjoyed this policy. VIVA believes that there is national preferential discrimination, violating Article III.4 of the General Agreement on Tariffs and Trade (GATT) to which Vietnam is a signatory.

Article III.4 provides that products imported from the territory of any contracting party into the territory of another contracting party shall enjoy treatment no less favourable than that accorded to like products of domestic origin in respect of laws and regulations./.