Increase in registration fee: Lose hundreds of millions more when buying a car

The policy of increasing registration fees has caused many car buyers to pay hundreds of millions of dong more than before.

Recently, the Ministry of Finance issued Decision 942/2017 adjusting the price list for calculating registration fees (LPTB) for cars and motorbikes, effective from May 24. This Decision adds the LPTB calculation price of 135 types of imported cars with 9 seats or less; 19 types of domestically assembled cars with 9 seats or less; two types of imported electric cars and many other types of cars.

Consumers suffer

Mr. Duy Tien (Binh Tan) just bought a Toyota Fortuner. The old registration fee for this car model was 950 million VND, now it has increased to 1.149 billion VND according to the new adjustment of the Ministry of Finance. "Instead of paying only 95 million VND/car as before, I have to pay nearly 115 million VND. Obviously, car buyers have suffered losses because they have to pay more money than the previous regulations" - Mr. Tien said.

Mr. Tran Tan, representative of an imported car business unit, pointed out: Genuine cars have their official prices. When car manufacturers reduce the selling price by 5%, 10% or 15%, customers will receive a corresponding reduction in LPTB. However, if the discount is less than 20%, the Ministry of Finance will not update the LPTB calculation price list. This causes car buyers to suffer losses because they still have to pay LPTB according to the price of the car that has not been reduced.

According to the Ministry of Finance, the construction of a national LPTB price list is aimed at preventing tax evasion. Because for a long time, the selling price of cars recorded on invoices is very low compared to the market price. In principle, dealers should sell cars at a higher price than the purchase price. However, dealers still record car sales invoices at the same price as the company price, if there is a difference, the difference is insignificant. That helps businesses evade taxes, and at the same time helps car buyers reduce LPTB when registering their cars.

From now on, car buyers will suffer losses due to having to pay additional registration fees.

However, Ms. Nguyen Thi Hien, in charge of Toyota's used car system, said that no matter how we prevent or tax, consumers will suffer. Because all of these costs are calculated by car manufacturers into the selling price of the car, and the final buyer has to bear the burden.

Ms. Hien also said that Toyota's policy is to have a unified price nationwide. Dealers are not allowed to sell higher than the price set by the company. For example, if a car model has a nationwide listed price of 1 billion VND, the dealer will receive a 7% commission. The dealer can only sell for 1 billion VND, not higher. Dealers can reduce the selling price by reducing their own profits.

Hit this one, hit that one

A representative of an imported car dealer in Ho Chi Minh City said that increasing the LPTB price for some car models is a correct policy to prevent tax evasion and trade fraud. Specifically, used car dealers often declare low import and selling prices to pay low taxes and fees. For example, a new car costs 3 billion VND. This car is used for a year and resold for 2.5 billion VND, but the seller and buyer agree to declare the purchase price as only 1 billion VND to evade taxes and reduce LPTB.

“Therefore, the Ministry of Finance increased the regulation that used car prices are calculated based on new car prices minus 5%/year. No matter what price you buy a used car at, there is only one calculation formula,” he analyzed.

Lawyer Tran Xoa, Director of Minh Dang Quang Law Firm, also said that increasing the LPTB price for many car models is indeed to prevent tax evasion. However, this increase does not "hit" the seller but "hits" the buyer. Therefore, the Ministry of Finance needs to make appropriate adjustments so that car buyers do not suffer losses, while still preventing tax evasion by dealers.

Lawyer Xoa analyzed: “Car companies should be responsible for offering suggested prices that are as close to the market price as possible. It is impossible for a company to offer a low suggested price just for reference, then dealers use the “scarce goods” trick with some car models to sell at sky-high prices, making huge profits but declaring low prices to evade taxes. If the dealer does not sell at the suggested price, the companies need to cut cooperation and hand over to other dealers to comply with the regulations. Car companies must be responsible for ensuring the benefits that car buyers deserve.”

Lawyer Xoa believes that this solution is unstable and only temporary. When the government increases the price of calculating LPTB, car manufacturers/dealers increase the selling price with the reason that this car model is “hot” and many people buy it. Then the dealers still earn more profit, but the buyers have to pay more.

According to VNN