What’s On

Rolls-Royce Phantom comes with 150 percent luxury tax tag

By Bui Hong Nhung   April 14, 2016 | 06:39 pm GMT+7
Rolls-Royce Phantom comes with 150 percent luxury tax tag

Tax rates levied on luxury cars will rise sharply following the National Assembly's decision to change the Law on Special Consumption Tax.

The new tax rates will come into effect on July 1.

Taxes imposed on under-nine-seat cars were adjusted on the reverse trends. The government will raise tax rates on luxury cars by up to 90 percent while the rates for other cars will remain the same or fall by five percent.

Dang Nhu Quynh, a car trader, told VnExpress that the price of a Rolls-Royce Phantom in Vietnam is about VND50 billion ($2.25 million). After the tax rate jumps to 150 percent, people will have to pay as much as VND70 billion to own a Phantom.

Other car importers said that the prices for a Lexus LX570 could reach VND7.3 billion rather than VND5.6 billion, while the price for a Lexus RX350 will be VND3.9 billion, up VND600 million due to tax changes.

Representatives from Ford and Mercedes said at a conference organized by the Institute for Economic Management Central in December 2015 that Vietnam’s tax policy is always changing so their companies are unlikely to make long-term plans or adapt to the new rules. In addition, rising road tolls are making it difficult to sell cars.

At the start of 2016, the Ministry of Finance applied a new formula for luxury taxes imposed on cars. The tax is calculated based on a car’s wholesale price, which is at least five percent higher than its cost price (including import price, import tax and luxury tax).

Updated details of luxury tax rates on cars.