Reduce import tax on automotive components to 0%.

The Ministry of Finance has just decided to reduce import taxes on automobile components for two categories of vehicles: passenger cars with fewer than 9 seats and engines of 2,000cc or less, and trucks under 5 tons, to 0%.

A representative from the Ministry of Finance stated that reducing import taxes on these components is one of the goals to boost Vietnam's ability to export automobiles in the future. The reduction will be in effect for five years, from 2018 to 2022.

Reducing import taxes on components will help domestic automobile manufacturers and assemblers increase their competitiveness when entering the regional market.

To qualify for a 0% import tax on components, domestic automobile manufacturing and assembly businesses must meet a minimum requirement of gradually increasing domestic production content, reaching 40% by 2022. With a 40% localization rate, Vietnam is eligible to export automobiles to ASEAN countries with a 0% tariff.

In addition to the localization rate criterion, businesses must also achieve a production and assembly growth rate of 16-18% per year for the two types of vehicles.

According to the Labor Newspaper