Proposal to reduce car registration fee by 50% during the epidemic season
The Ministry of Industry and Trade has just proposed to halve car registration fees to stimulate demand for this item during the epidemic season.
Domestic automobile manufacturing and assembly are among the key industrial sectors negatively affected by Covid-19. In a report to the Government, the Ministry of Industry and Trade proposed a 50% reduction in registration fees for domestically produced and assembled cars until the end of 2020 to stimulate consumer demand.
Currently, the registration fee is determined by the percentage of each type of vehicle and each locality when registering. The registration fee for cars in Hanoi, Quang Ninh, Hai Phong... is 12% of the car's value; 10% in Ho Chi Minh City, 11% in Ha Tinh... For pickup trucks, the registration fee is 60% of the first fee for cars. For example, a Honda CRV 2020 1.5E with a listed price of 983 million VND, the registration fee if registered in Hanoi is nearly 118 million VND, and in Ho Chi Minh City it is 98.3 million VND.
The proposal to reduce car registration fees by 50% was made by the Ministry of Industry and Trade when the consumption of this item decreased seriously compared to last year, while inventory increased by 122.5%. According to the Vietnam Automobile Manufacturers Association (VAMA), car consumption in 2020 could decrease by more than 15%.
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In addition, the Ministry of Industry and Trade also proposed that competent authorities allow an extension of the deadline for paying special consumption tax, corporate income tax and VAT for domestic automobile manufacturing and assembling enterprises until the end of the first quarter of 2021. This proposal stems from the fact that a series of automobile manufacturing factories of joint ventures such as Honda, Toyota, Ford, Nissan or domestic enterprises such as Vinfast, Thanh Cong Group are forced to close until April 15 or until "the epidemic is controlled" due to Covid-19.
The agency also proposed that the State Bank direct banks to reduce lending interest rates for industrial production enterprises, including automobiles, by 30% compared to current interest rates for 12-24 months; and restructure debt for 18-24 months if Covid-19 persists.
On the other hand, the impact of Covid-19 has caused businesses' inventories to increase, forcing many businesses to temporarily suspend production. Therefore, the documents proving the impact, sources of debt repayment, debt restructuring conditions... of banks also need to be simpler for businesses to easily meet.
