150% taxable Automotive, luxury will appreciate Shock

150% taxable Automotive, luxury will appreciate Shock
Also plan a slight increase excise taxes (70-75%) with the automotive to the Finance Ministry’s proposal, the Office of the Government is holding consultation with option 2, the tax increase to 90-150% upon the recommendation of the Ministry of Industry and Trade.
Automobile tax spike 1.5 times
Special consumption tax on passenger cars from 9 seats or under still no consensus between ministries when put in amendments in the Bill amending and supplementing some articles of the Law on taxation. The draft law will be submitted to the National Assembly session next October.
Therefore, the Government Office has written to send the members of the Government for final comments on the selection of one of two alternatives modified automobile tax.
Accordingly, for the car to a capacity of 3.0 liters or more, are subject to special consumption tax of 60% have two options huge difference.
In option 1, all vehicles over 3.0 liters capacity will apply a uniform tax rate under certain route. From 1.7.2016, excise duty shall be equal to 75%, an increase of 15% compared with the current. From 1/1/2018, cars on the 3.0 liter taxed 70%, down 5% over the period of 1.5 years and up 10% compared to today.
This is the plan proposed by the Finance Ministry.
In option 2, the cars will be broken up more capacity, with each separated by 1.0-liter cars and high tariffs apply best record ever.
Specifically, the vehicle has a capacity of 3.0 liter and 4.0 liter, excise tax applied at 90%, up 30% compared with the current.
Vehicles with a capacity of 4.0 liters to 5.0 liters will bear the tax rate of 110%, an increase of 50% compared with the current.
Vehicles with a capacity of 5.0 liters to 6.0 liters of 130% tax rate, up 70% compared with the current.
And the cars with a capacity of 6.0 liters or more, special consumption tax rate of 150%, an increase of 90% compared to today, that is 1.5 times higher than the current tax rate.
Time is uniformly applied from 1.7.2016, no change in the short term.
Option 2 was proposed by the Ministry of Industry and Trade.
Historically excise tax for cars, the highest rate recorded was 100% for cars under 5 seat passenger, applied from 1999-2003 under the Law on Special Consumption Tax dated 20.05.1998.
Luxury tax surged to stimulate small cars
As VietNamNet each reflection, MOIT when drafting the decision of the Prime Minister on policy development the automotive industry has studied oriented adjusting excise tax for luxury and extreme ultra reduction low for small cars.
The 6.0-liter cars to ever be on the proposed tax increase to 195%, compared with 2.25 times more current and up to 45% compared with option 2 is recommended.
However, the Finance Ministry has rejected the proposal of the Ministry of Industry and Trade on this issue with reason Excise Tax Act recently amended and approved by the National Assembly through the end of 2014.
The meeting of the permanent government in early temporarily agreed not adjust excise duty automobiles in 3 years, ie up to 2018.
However, recently, on 18/7, the Government Office has issued Notification No. 229 conveys the conclusions of the Prime Minister on policy development the automotive industry has clearly stated policy of “adjusted tax rate Excise tax cars according to the principle divide into small groups … “and” high tax rate is particularly high for cars up to 9 seats a capacity exceeding 3.0 liters “.
However, the Ministry of Finance – the drafting the Bill on still maintains the view is not split over 3.0 liters capacity and vehicle tax increased only moderately, from 10-15% over current.
Even when public consultation on the bill last month this past August, the plan as proposed MOIT has not been referred to the Ministry of Finance.
Experts from the Ministry of Industry and Trade said that the excise tax under national sovereignty, not dominated by the integration commitments.
To stimulate the automotive industry develop in the right direction, this Ministry that must start by driving through consumer oriented policies extremely high tax increase on luxury and ultra-low tax breaks for small cars, the cars are development priorities.
Thereby, the car market will have a clear differentiation, consumer demand for small cars will rise thanks to cheap, car sales volume increased motivation for the domestic automobile business investment and development lines Car priorities. In fact, many automobile enterprises localization refused because the reason the market capacity is not big enough.
Show vehicles to over 3.0 liters for only less than 3% of the personal car market but the value is great. Vehicles less than 1.5 liters has increased its market share from 26.6% quickly in 2011 to 36% from 1.5 to 20 liters in 2014. Cars accounted for the largest market share in the segment of personal vehicles, down from 49.3 % in 2011 to 38.9% more than in 2014.
In writing to the Ministry of Finance and the Government Office, the Ministry of Trade and Industry expressed loyalty point: support option 2, spike special consumption tax on automobiles to 3.0 liter of 0, 5 times to 1.5 times. The ministry believes that regulating such tax would contribute offset revenue deficit reduction when importing cars to come.
With less than 1.5 liter cars, currently subject to excise tax is 45%, the Government Office also launched two schemes to require the members selected.
Option 1, cars are divided into 2 categories by volume. With a 1.0-liter or less vehicles, the tax reduction applies to 25% from 1.7.2016 and from 1.1.2018 will continue to reduce the tax rate was 20%. 1.0-1.5 liter cars, the tax reduced to 30% as from 1.7.2016 and from 1.1.2018, down to just 25%.
With option 2, all under 1.5 liter vehicles will apply a 30% rate.