No $1,000 subsidy for EV owners: finance ministry

By Quynh Trang   September 7, 2023 | 10:31 pm PT
No $1,000 subsidy for EV owners: finance ministry
An electric car distributed in Vietnam. Photo by VnExpress/Thanh Nhan
The Ministry of Finance has rejected the Ministry of Transport's recommendation to incentivize electric vehicle ownership with a US$1,000 subsidy, saying the government needs to prioritize poor people.

The subsidy might be offered in some countries but is not appropriate for Vietnam and could attract public criticism, it said.

The transport ministry had last month called for the cash incentive to induce people to buy electric vehicles, and also reducing or scrapping registration fees for them.

Transport companies that use electric vehicles should be eligible for low-interest loans and electric buses used in public transport should get higher subsidies, it had said.

It had also wanted parking space in urban areas prioritized for electric cars.

An online survey of 4,900 VnExpress readers found 74% supporting the $1,000 cash-support proposal.

Now electric vehicles with nine seats or fewer only attract special consumption tax of 3% against 15% for gasoline cars.

This lower rate will continue until February 2027.

The transport ministry has recommended that it should be extended, but the finance ministry disagreed pointing out that it would violate Vietnam's commitments to the World Trade Organization.

It also voiced against some of the transport ministry's proposal to incentivize electric car ownership such as not imposing value-added tax and registration fees for five years.

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