Are many types of vehicles about to be subject to "exceptionally high" taxes?

Prime Minister Nguyen Tan Dung has just directed relevant ministries and agencies to coordinate in finalizing the draft decision on mechanisms and policies to implement the strategy and planning for the development of the automotive industry in the new phase.

Most businesses still mainly operate on a simple assembly basis and have not yet been able to manufacture important components such as engines, gearboxes, and transmission systems.

Regarding tax policy, the Prime Minister assigned the Ministry of Finance to lead and coordinate with the Ministry of Industry and Trade and other relevant sectors to research and adjust the excise tax rates based on the principle of dividing them into smaller groups than stipulated in the current Excise Tax Law, and with reference to the experience of some countries in the region.

The adjustments should aim to reduce tax rates on priority vehicle lines that have a competitive advantage for the domestic automotive industry.

However, conversely, for passenger vehicles with fewer than 10 seats using engines with a cylinder capacity exceeding 3.0 liters, vehicles with high fuel consumption, vehicles whose size is unsuitable for traffic infrastructure and people's income levels, vehicles with high emissions, and vehicles with high absolute value, the Prime Minister requested the application of high and exceptionally high special consumption tax rates.

Regarding corporate tax policy, the Prime Minister requested that more favorable corporate income tax incentives be applied to large-scale production projects, projects producing priority vehicle lines, and projects producing critical components. The specific incentive level for each project will be decided by the Prime Minister.

Adjustments related to corporate income tax and excise tax policies need to be urgently revised and adjusted for submission to the Government for consideration and presentation to the National Assembly at the 10th session of the 13th National Assembly.

Regarding policies to encourage the production of automotive parts and components, especially critical components such as engines and gearboxes, the Prime Minister requested that the content and timeline be clearly stated; issues under the Government's authority should be proposed for assignment to relevant ministries and agencies; and cases under the National Assembly's authority should be proposed for submission to the National Assembly by relevant agencies as prescribed.

According to the Prime Minister's concluding remarks at the Government's Standing Committee meeting on mechanisms and policies for implementing the strategy and planning for the development of Vietnam's automotive industry, the Vietnamese automotive industry has achieved some results recently but has not yet met the set objectives.

Notably, the majority of businesses still primarily operate in the form of simple assembly, and have not yet been able to manufacture crucial components such as engines, gearboxes, and transmissions; moreover, the mechanisms and policies for the development of the automotive industry in recent years have not been suitable and have not created the impetus for the industry's development.

Therefore, policy adjustments to support the development of the automotive industry are urgently needed at this time, given the increasing pressure of integration, specifically the pressure from imported vehicles under the tariff reduction schedules of the trade agreements that Vietnam is a party to.

Previously, in July 2014, Prime Minister Nguyen Tan Dung also signed a decision approving the strategy for the development of Vietnam's automobile industry until 2025, with a vision to 2035.

The overall objective of this strategy is to develop Vietnam's automotive industry into a key industry, meeting domestic market demand for competitive vehicles, participating in exports, creating momentum to promote the development of other industries, and enhancing competitiveness to become a supplier of components and parts in the global automotive industry production chain.

According to VnEconomy