Reducing registration fees for domestically produced cars could reduce the budget by 867 billion VND/month

To contribute to stimulating consumption, providing financial support to people and businesses, and creating momentum to restore growth for the domestic automobile manufacturing and assembly industry in the context of many economic difficulties and challenges, the Ministry of Finance believes that continuing to reduce the LPTB collection rate for domestically produced and assembled automobiles is one of the necessary solutions.

Following the direction of the Government, the Ministry of Finance submitted to the Government a further reduction of 50% of the LPTB collection rate from the effective date of this Decree until January 31, 2025. From February 1, 2025 onwards, the LPTB collection rate will continue to be implemented according to the provisions of Decree No. 10/2022/ND-CP dated January 15, 2022 of the Government.

The Ministry of Finance proposes to reduce registration fees for domestically produced cars, the budget could reduce by VND867 billion/month. (Photo: BTC)

Assessing the impact on the State budget revenue, according to calculations by the Ministry of Finance, in 2020 and 2022, the reduction in State budget revenue from excise tax will be about VND 5,238 billion, and the increase in State budget revenue from special consumption tax (SCT) and value added tax (VAT) will be about VND 5,200 billion.

In addition to continuing to implement the policy of reducing 50% of the LPTB collection rate for domestically manufactured and assembled cars at the current stage, the increase in revenue from special consumption tax and VAT may not be enough to compensate for the reduction in LPTB. It is expected that reducing 50% of the LPTB collection rate for domestically manufactured and assembled cars may reduce the State budget revenue from LPTB by an average of about VND 867 billion/month (equivalent to the reduction according to Decree No. 41/2023/ND-CP).

In addition, the 50% reduction in the LPTB collection rate for domestically produced and assembled cars may affect the balance of state budget revenues of localities. According to the provisions of the State Budget Law, LPTB collection belongs to the local budget. The 50% reduction in LPTB collection rate for domestically produced and assembled cars will likely increase the number of cars sold and registered, so revenues from LPTB, special consumption tax, and VAT may increase.

However, the actual revenue from special consumption tax and VAT is only concentrated in 8 localities where there are domestic automobile manufacturing and assembling companies, while other localities have reduced local budget revenue from this policy. Therefore, the locality has requested the central budget to compensate for this revenue shortfall to ensure local budget balance.

Source: https://www.congluan.vn/giam-phi-truoc-ba-doi-voi-o-to-san-xuat-trong-nuoc-ngan-sach-co-the-giam-867-ty-dong-thang-post300775.html