On July 16, the Ministry of Justice announced the meeting documents to review the draft Decree regulating the registration fee (LPTB) for automobiles, trailers or semi-trailers pulled by automobiles and similar vehicles manufactured and assembled domestically.
According to the Ministry of Finance, the reduction of registration fees for domestically manufactured and assembled cars has been implemented in 3 phases, including: from June 28, 2020 to December 31, 2020; from December 1, 2021 to May 31, 2022; from July 1, 2023 to December 31, 2023.
From January 1, 2024, the LPTB collection rate for domestically manufactured and assembled automobiles will be implemented according to Decree No. 10/2022/ND-CP, accordingly, the LPTB collection rate for domestically manufactured and assembled automobiles will be equal to the LPTB collection rate for automobiles of the same type.
Entering early 2024, automobile manufacturing and assembly enterprises in particular and the entire economy in general continue to face many difficulties and challenges from domestic and foreign factors. In addition, inflationary pressures, exchange rates, high gold prices... affect consumer sentiment, leading to a trend of tightening spending on high-value items, including automobiles.
Based on the reality of the automobile market in the last months of 2023 and early 2024, the total automobile market sales in early 2024 (including passenger cars and commercial vehicles) decreased significantly.
According to the sales report of the Vietnam Automobile Manufacturers Association (VAMA): sales of enterprises under VAMA reached 108,309 vehicles, down 5% compared to the same period in 2023 (of which passenger cars reached 77,351 units, down 7%; commercial vehicles reached 30,022 units, up 2% and specialized vehicles reached 936 units, down 13% compared to 2023).
According to VAMA, the average consumption of domestically produced and assembled cars in the first 5 months of 2024 was about 10,977 cars/month. During the period of production and business recovery, it is expected that in 2024, the economy in general and the automobile market in particular will have to cope with other negative impacts due to economic recession and global geopolitical conflicts and supply disruptions, which have become especially tense since the pandemic.
In 2024, while the output and sales of domestically produced and assembled cars continued to decline, imported cars increased rapidly. In addition, since the beginning of 2024, many imported car models have been heavily discounted by distributors, helping to increase sales, surpass and significantly narrow the gap compared to domestically produced cars.
Vietnam has signed 17 FTAs, many of which commit to reducing import tax on completely built-up cars to 0%. Implementing these commitments will put pressure on imported cars with high quality, high technology, and competitive prices compared to domestically produced and assembled cars. These are special difficulties in the current period. If we only rely on resources and individual stimulus solutions of each enterprise, it will not be enough to create stability in maintaining output and sales as well as the resilience to help the market grow again, evenly and sustainably.
The Ministry of Finance added that over the years, the reduction in registration fees has also had an impact on reducing state budget revenue, by VND7,314 billion; VND7,896 billion and VND5,238 billion, respectively.
If the registration fee continues to decrease in 2024, the state budget is expected to lose about VND5,200 billion in revenue.
In this file, the Ministry of Finance also updated the comments of ministries, branches and localities. Accordingly, the units basically agreed with the draft Decree. In addition, the Ministry of Planning and Investment, the Ministry of Justice and the Ministry of Industry and Trade expressed concerns about violations of international commitments.
Specifically, continuing to reduce registration fees as in the draft Decree will violate international commitments, leading to the risk of being penalized for violations or retaliation from countries to which Vietnam exports goods. It is necessary to develop a plan to proactively respond.
The Ministry of Finance does not want to reduce registration fees for domestically produced cars due to concerns about violating international commitments (illustrative photo).
Regarding this issue, the Ministry of Finance said: In the official dispatch dated April 26, 2024 and the Government Submission No. 121/TTr-BTC dated May 31, 2024, the Ministry of Finance reported to the Government and the Prime Minister in detail on continuing to implement the policy of reducing 50% of the LPTB collection rate for domestically manufactured and assembled automobiles.
In particular, this agency has specifically assessed the impact of reducing the 50% LPTB collection rate for domestically produced and assembled cars, the violation of international commitments and proposed 2 options:
Option 1: consider not reducing the LPTB collection rate for domestically produced and assembled cars.
Option 2: reduce 50% of LPTB collection for domestically produced and assembled cars for 6 months.
Based on the analysis of the advantages and disadvantages of each option, the Ministry of Finance proposes that the Government implement option 1.
However, in Notice No. 264/TB-VPCP dated June 19, 2024, Deputy Prime Minister Le Minh Khai commented: "Most opinions at the meeting agreed to submit to the Government regulations on reducing the LPTB for domestically produced and assembled automobiles in accordance with Resolution No. 44/NQ-CP and to develop the Decree according to the procedural order to ensure the progress and effectiveness of the policy, shortening.
The Ministry of Finance fully accepted the valid opinions at the meeting, completed the dossier of the Decree on the LPTB collection rate for domestically produced and assembled automobiles, in which it noted to supplement the content of analysis and impact assessment to ensure completeness, comprehensiveness, and consistency (impact on state budget revenue, impact on production and business activities of enterprises, level of violation of commitments, possibility of complaints and lawsuits), and reported to the Government in June 2024".
Implementing the direction of Deputy Prime Minister Le Minh Khai in the above announcement, the Ministry of Finance has drafted the Decree in accordance with the direction in Resolution No. 44/NQ-CP of the Government.
However, to respond to violations of international commitments as mentioned by the ministries, the Ministry of Finance submitted to the Government to assign the Ministry of Industry and Trade to preside over and coordinate with relevant agencies to review and develop response plans in case Vietnam is sued for violating international commitments.
Source: https://www.nguoiduatin.vn/bo-tai-chinh-khong-muon-giam-le-phi-truoc-ba-o-to-san-xuat-trong-nuoc-204240717143652054.htm
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