The Ministry of Finance proposed two options to exempt and reduce registration fees for electric cars to promote green transformation.
Proposal to exempt registration fee for electric cars for 3 more years
According to Decree 10/2022/ND-CP exempting registration fees for electric cars, from March 1, 2022, battery-powered electric cars will be eligible for preferential registration fees for 5 years, including 100% exemption for the first 3 years and 50% reduction for the next 2 years. That is, after February 28, 2025, electric car buyers will no longer be exempted, but will have to pay 50% of this fee.
In order to continue to encourage and promote green transformation in Vietnam, in a recent dispatch sent to the Prime Minister, VinFast proposed extending the registration fee exemption period for another 3 years from March 1, 2025 to February 28, 2028 and applying a 50% reduction for the next 3 years.
According to this car company, preferential policies on registration fees are effective for Vietnam's green transition process. Especially in the context that Vietnam is suffering from serious environmental pollution from emissions from vehicles using fossil fuels and is starting to enter the "automotive" phase.
“ Many countries have policies to encourage and promote green conversion such as direct support for car purchases and electricity bills for people or support in terms of land, finance, credit incentives, tax exemptions and reductions for businesses that produce and develop electric vehicles…” - VinFast stated.
The Vietnam Automobile Industry Development Strategy to 2030, with a vision to 2045, also has appropriate orientations for the development of environmentally friendly vehicles such as fuel-efficient vehicles, hybrid vehicles, biofuel vehicles, electric vehicles, etc.
However, according to an industry expert, support policies for the development of environmentally friendly vehicles in Vietnam are still quite limited. Up to now, there has only been a policy to support special consumption tax and registration fees for battery-powered electric vehicles and there is no specific roadmap for the development of other electric vehicles in Vietnam. Therefore, " to promote green transformation, the Government needs to have strong enough support policies, not increase taxes and fees" - the expert recommended.
Propose 2 options
Regarding this issue, the Ministry of Finance said it is seeking opinions from relevant ministries and branches on a draft dispatch to the Prime Minister on options to exempt and reduce registration fees for electric cars to promote green transformation.
Accordingly, the Ministry of Finance proposed two options. Option 1 is to continue to reduce the registration fee by 50% for battery-powered electric cars according to Decree 10.
Specifically, preferential regulations on registration fees within 5 years, including exemption for the first 3 years (from March 1, 2022 to February 28, 2025), 50% reduction for the next 2 years (from March 1, 2025 to February 28, 2027) for battery-powered electric cars specified in Decree 10 (after assessing the impact of the policy of exemption and reduction of registration fees; referring to international experience on registration fees, as well as through many meetings to discuss and agree between Government leaders and relevant ministries and branches).
The Ministry of Finance said that implementing this plan ensures policy stability and does not affect state budget revenue, especially local budgets. According to calculations, the budget revenue reduction will be about VND627 billion per year if the proposal to extend the incentive period of enterprises is followed.
Option 2, study exempting 100% of registration fees for the remaining 2 years, from February 1, 2025 to February 28, 2027, instead of reducing 50% as prescribed. This option is considered to further encourage green transportation, according to the direction of Deputy Prime Minister Tran Hong Ha in Notice No. 08/TB-VPCP dated January 8, 2025 of the Government Office.
However, the Ministry of Finance said that 6 months before the end of the preferential period on registration fees within 5 years, this agency will summarize, evaluate and propose for the next period. If implementing according to this plan, it is necessary to develop a Decree amending and supplementing Decree 10. " Therefore, the Ministry of Finance is leaning towards plan 1 " - the Ministry of Finance stated.
Currently, the registration fee for cars is calculated based on a percentage of each type and each locality when registering. For example, the first fee for cars in Hanoi, Quang Ninh, Hai Phong is 12% of the car value; Ho Chi Minh City is 10%, Ha Tinh is 11%... For pickup trucks, the registration fee is 60% of the first fee for cars. From the second payment, the registration fee is 2% and is applied uniformly nationwide.
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