New tax proposal - opportunity to buy small cars for Vietnamese people

If the new tax proposal is applied, the price of small cars with engines under 2 liters will decrease by about 14% while those with engines of 2 liters or more will increase in price.

In early 2015, the Ministry of Industry and Trade proposed to change the special consumption tax rate, which would impose a very high tax on cars with large cylinder capacity, from 2 liters or more, while small cars under 2 liters need to reduce tax to stimulate consumption.

Small cars with capacity under 2 liters have a chance to reduce price.

Up to now, after a period of consulting with ministries, branches and enterprises, the Government has officially submitted to the National Assembly for approval the revised content of special consumption tax rates. Details are as follows:

Under the new tax calculation, cars with cylinder capacity under 2 liters will have tax reduction, thereby reducing selling price, stimulating buyers. This type of engine is usually installed on popular cars from small to medium size.

On the contrary, cars with cylinder capacity of 2 liters or more have increased tax, the higher the capacity, the higher the tax rate, thereby increasing the price, limiting consumption. Large popular cars or luxury cars, super luxury cars, sports cars are the car models that often have this engine.

Assuming a car model is imported, the basic selling price is calculated according to the following formula: Ax (1+%NK) x (1+%TTDB) x (1+%VAT) x (1+%other costs). In which A is the cost price, % is understood as the tax rate of import tax (NK), special consumption tax (TTDB) and value added tax (VAT). Other costs include fees that must be paid as well as advertising and sales costs... of the company. The calculation is similar for domestically assembled cars.

Assuming that other taxes, fees and charges remain unchanged, the vehicle price depends only on the special consumption tax, the price change after the new tax proposal will be calculated at the rate: (1 + % new special consumption tax) / (1 + % old special consumption tax). Based on this calculation, the price change of some typical vehicles in each segment is as follows:

Car segment under 2 liters:

Cars in the popular segment from size A like Morning, Grand i10 to size C like K3, Altis are all likely to have their prices reduced. Currently, cars in this range usually cost around 800 million or less, which is suitable for the financial capacity of the majority of customers who want to buy a car. However, within the same car model, there will also be changes. If it is the same Altis, the version with a 2-liter engine will increase in price due to increased taxes while the 1.8-liter version will decrease in price as shown in the table above.

Vehicle segment from 2 liters and up:

From Camry 2.5Q and above, prices have increased rapidly, the highest increase for Phantom is 30 billion to nearly 47 billion. It can be seen that cars in the "billion" segment have increased rapidly compared to cars around 800 million or less.

However, the calculation based on engine capacity causes difficulties for some models in the economy class but equipped with 2-liter engines or more. For example, Honda CR-V has a 2.4 version or Toyota Camry has a 2.5 version, which are mid-size popular cars, within the feasible purchasing range of many customers but suffer the same fate of price increase as luxury cars.

According to VnExpress