Used cars now cost more as Vietnam hikes taxes

By Bui Hong Nhung   September 13, 2016 | 06:50 pm GMT+7

The government tries to curb imports of second-hand automobiles to encourage the use of new, energy-efficient vehicles.

Older is not always cheaper. 

Under a new decree, traders will have to pay an extra US$1,500-$2,000 worth of taxes to bring an old car under nine seats into Vietnam. 

The move aims to prevent tax losses and encourage traders to switch to new vehicles that consume less fuel.

New cars imported to Vietnam are subject to import tax, special consumption tax and value-added tax. Apart from the same taxes, old products also have to carry a fixed duty.

The newly published decree has raised this fixed duty on under-nine-seat car with small engines of less than 1,000cc from $3,500 to $5,000, and that on cars with large engines from $8,000 to $10,000. The rates for other ranges have been kept unchanged.

“These high taxes have pushed up prices of old cars, with some now surpassing new cars,” said a car trader.

He said a 2015 Toyota model usually cost $20,000 if it’s new and $18,000 if it’s old. But with more taxes slapped on it, the old car can now be $3,000 more expensive than the new one. 

Le Anh Duc from Ho Chi Minh City’s Binh Thanh District said he plans to buy a second-hand car, but the new tax rates are making him think twice. 

Official data showed that the country imported some 71,000 cars after the first eight months of this year, down 23,000 units from the same period last year.

On July 1, the special consumption tax imposed on cars was hiked to up to 150 percent as the government moved to restrict the number of luxurious automobiles on the streets. 

Related news:

Tax hike drives Vietnamese consumers away from luxury cars

Car imports still face red light after Vietnam refuses to budge on legislation

 
 
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