Tax incentives for electric cars proposal not approved

The Ministry of Finance has responded that it cannot consider the request to reduce import tax of electric cars because it affects domestic electric car production and reduces budget revenue.

Recently, the Ministry of Finance has given feedback to businesses and the Vietnam Association of Mechanical Enterprises (VAMI) on the proposal of tax incentives for electric cars.

Recommendations are proposed by businesses and VAMI to propose a roadmap for preferential import tax reduction for cars using electric motors for 2 years in the Vietnamese market.

Specifically, passenger cars using electric motors (HS code 8703.80.99) are proposed to apply the import tax rate of 0% from January 1, 2023 to December 31, 2024. From January 1, 2025, a tax rate of 70% will be applied.

oto dien nhap khau anh 1

oto dien nhap khau anh 1

Enterprises and VAMI propose to apply tax incentives to imported electric cars. Photo: Chi Vu.

Cargo cars using electric motors (code 8704.60.91, 8704.60.92. 8704.60.53) are also recommended to apply the tax rate of 0% from January 1, 2023 to December 31, 2024. The proposed tax rates to apply after the above time are 70% and 25%.

(vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display(“vi_682621617”) })

The reasons given by businesses and VAMI include promoting the development of electric cars to gradually replace traditional cars using fossil fuels.

However, according to the Ministry of Finance, the preferential policy for cars using electric energy has been added by the state to Decree No. 57 2020.

If the MFN import tax is reduced (the tax rate applied to goods and articles produced from WTO member countries entering the Vietnamese market) for 2 years as proposed, while businesses do not have specific plans will create many difficulties in management.

READ MORE:  Which Industries Can Benefit From Video Production

Investing in the electric car manufacturing industry requires a long-term strategy, large capital and related resources. Currently in Vietnam, Vinfast is the only enterprise investing in an electric car factory.

The Ministry of Finance believes that tax incentives for imported electric cars will affect car manufacturers and businesses that invest in producing this vehicle in the country.

Businesses will also take advantage of the tax reduction policy to import a series of electric cars into Vietnam, causing a decrease in budget revenue. As such, the Ministry of Finance has not considered adjusting and reducing MFN import tax for electric vehicles as proposed.

(vitag.Init = window.vitag.Init || []).push(function () { viAPItag.display(“vi_682621617”) })

@ Zing News

News related