Proposal to increase registration fee by 3 - 4.5 times for pickup trucks under 1.5 tons

The Ministry of Finance said that the first increase in the tax rate for pickup trucks and VAN trucks with a permitted load capacity of less than 1.5 tons and 5 seats or less will contribute to increasing budget revenue.

The Ministry of Finance has just officially announced the draft amendment and supplement to a number of articles of Decree No. 140/2016/ND-CP dated October 10, 2016 of the Government on registration fees.

Accordingly, the notable point in this draft Decree is that the Ministry of Finance proposes to increase the initial registration fee for pickup trucks and VAN trucks with a permitted load capacity of less than 1.5 tons and 5 seats or less.

According to the proposal, a pickup truck worth 600 million VND will have to pay a registration fee of 36-54 million VND, instead of 12 million as at present.

Specifically, the first registration fee for this type of vehicle will be 60% of the first registration fee for cars (within the range of 10-15%), instead of the current 2%. Only when re-registering from the second time onwards, will the registration fee for this type of vehicle be 2%.

Thus, for example, a pickup truck worth 600 million VND, according to current regulations, the buyer must pay a registration fee of 2%, which is 12 million VND. However, if applied as proposed, the registration fee that the buyer will have to pay is 600 million x 10% x 60% = 36 million VND; or 600 million x 15% x 60% = 54 million VND, 3 - 4.5 times higher than the current rate.

The draft Decree also clearly stipulates that in the case of organizations and individuals who have been exempted or do not have to pay registration fees when registering ownership of cars and motorbikes, when transferring them to other organizations or individuals, or changing the purpose of use without being exempted from registration fees according to regulations, they will have to pay registration fees at the first rate, which is 60% of the first registration fee for cars.

Explaining the reason for this proposal, the Ministry of Finance said that in fact, in the recent period (2012 - 2017), the number of pickup trucks, including cargo pickup trucks and passenger pickup trucks (imported and domestically produced and assembled) increased every year, especially the import growth rate was fast.

Specifically, the number of imported pickup trucks in 2017 was 28,482, an increase of 8.7 times. The number of pickup trucks carrying goods with a carrying capacity of less than 1.5 tons and 5 seats or less (imported and domestically produced and assembled) in 2012 was 3,305, but in 2013 it doubled to 6,902. By 2014, the number of these vehicles was 10,961, in 2015 it was 20,132, in 2016 it was 28,091 and in 2017 it was 28,911.

"Thus, the average number of imported, manufactured and assembled vehicles of this model is about 16,383 units, accounting for about 99.8% of the number of pickup trucks," said the Ministry of Finance.

According to this unit, in reality, pickup trucks and VAN trucks with a permitted load capacity of less than 1.5 tons and 5 seats or less are used to carry both people and goods; other trucks are mainly used to carry goods.

In addition, in Notice No. 133/TB-VPCP dated March 14, 2017 of the Government Office announcing the conclusion of Deputy Prime Minister Trinh Dinh Dung at the meeting on the situation of automobile imports, the Ministry of Finance was assigned to study and re-evaluate the registration fee for pickup trucks to propose a report to the Government for timely adjustment to suit the reality and purpose of use of this type of vehicle.

"Therefore, implementing the direction of Deputy Prime Minister Trinh Dinh Dung, to ensure fairness in the first and second registration fee collection for passenger cars, it is necessary to study and regulate the first registration fee collection for pickup trucks and VAN trucks with a permitted load capacity of less than 1.5 tons and 5 seats or less," the Ministry of Finance emphasized.

In addition to explaining, the Ministry of Finance also assessed the impact of this proposal. Accordingly, this unit believes that increasing the registration fee for vehicles will contribute to ensuring state management of pickup trucks and VAN trucks with a carrying capacity of less than 1.5 tons and 5 seats or less; contributing to regulating and limiting the use of means of transport in large cities.

In addition, it also ensures the consistency of the law on registration fees, enhancing the legality of current regulations on registration fees for the transfer of cars and motorbikes with diplomatic license plates to other organizations and individuals.

In particular, according to the Ministry of Finance, this proposal will contribute to increasing budget revenue. Specifically, according to current regulations, the first registration fee for pickup trucks and VAN trucks with a carrying capacity of less than 1.5 tons and 5 seats or less is 2%.

Therefore, if the first collection rate for these types of cars is adjusted to 60% of the first registration fee rate for cars (within the range of 10-15%), the registration fee collection from these types of cars will increase.

However, on the contrary, for organizations and individuals, this proposal will make the amount of registration fee payable when registering new higher than the current collection level, but will also help to make regulations clearer and easier to follow when implementing.