Electric cars coming to Vietnam will have surprisingly cheap prices

The Ministry of Finance plans to reduce the tax rate from 70% to 50% to encourage the import and use of electric cars.

The Ministry of Finance is seeking comments on the draft decree on the Export Tariff Schedule, Preferential Import Tariff Schedule, List of goods and absolute tax rates, mixed tax, and import tax outside the tariff quota.

In particular, the Ministry of Finance proposed to reduce tax on electric cars compared to the current tax rate.

Electric passenger cars with less than 9 seats currently have an import tax of 70%, equal to WTO commitments.

According to some FTAs, the special preferential tax rates for electric cars are as follows: ATIGA: 0%, ASEAN - Korea: 0%; ASEAN - China: 50% in 2018, ASEAN - Japan: 4%. Tesla electric cars imported from the US are subject to the MFN tax rate of 70%.

Electric cars are proposed to have a sharp reduction in import tax.

The Ministry of Finance believes that electric cars (without internal combustion engines, running 100% on electricity) are environmentally friendly products. Currently, countries around the world are very interested in encouraging the production and use of this type of electric vehicle, so the Ministry of Finance plans to reduce the tax rate from 70% to 50% to encourage import and use.

The import turnover of electric cars in 2016 was 498 thousand USD, mainly imported from Japan, China, the US,... of which only 70,000 USD was declared at the MFN tax rate of 70%.

Assessing the impact of reducing electric car import tax on budget revenue, the Ministry of Finance said: Taking the taxable import turnover in 2016 as the basis for calculation, import tax revenue decreased by 0.014 million USD/year (equivalent to only about 0.3 billion VND).

According to VNN