At the regular press conference on May 18, the Ministry of Industry and Trade received many questions related to reducing registration fees for domestically produced cars.
Citing a report from the Vietnam Automobile Manufacturers Association (VAMA), Mr. Nguyen Ngoc Thanh, Deputy Director of the Department of Industry, said that the number of cars sold on the market has decreased sharply. Businesses are facing a situation of high inventory.
There are many reasons for this situation such as difficult access to bank capital, high interest rates, exchange rates and inflation...
Therefore, recently, the Ministry of Industry and Trade has coordinated with automobile manufacturing enterprises, associations such as VAMA, VAMI, and provinces with automobile manufacturing plants to report to the Government for consideration and proposal to reduce registration fees for automobiles; extend the payment deadline for special consumption tax as well as value added tax.
“The Government has assigned the Ministry of Finance to consider the proposal of the Ministry of Industry and Trade. The Ministry of Industry and Trade believes that in 2020-2021, the 50% reduction in registration fees has also been implemented. In addition to the efforts of businesses to reduce selling prices, support from the State is needed. In the spirit of Resolution 11 of the Government, the Ministry of Industry and Trade strongly supports the 50% reduction in registration fees. In particular, we propose to reduce registration fees in 2023,” Mr. Thanh shared.
A representative of the Department of Industry said that this is an issue under the Government's authority. The Ministry of Industry and Trade will coordinate with the Ministry of Finance to discuss this policy because the decline of the automobile industry is very obvious.
In response to the opinion that in the context of the budget facing many difficulties in revenue, reducing registration fees could reduce budget revenue, the leader of the Ministry of Industry and Trade disagreed.
Deputy Minister of Industry and Trade Do Thang Hai said that the fact that registration fee reductions in recent years show that enterprises' production and business are not only stable but also growing, contributing to increased car sales, helping to increase budget revenue through other taxes.
Specifically, the issuance of a policy to reduce registration fees by 50% in the first 6 months of 2020 caused registration fee revenue to decrease by VND 7,314 billion, but total state budget revenue from automobiles increased by VND 14,110 billion.
A report from the Ministry of Industry and Trade shows that in the first four months of the year, automobile production decreased by 19.3% compared to the same period last year.
According to VAMA's recent April 2023 sales report across the market, car sales continued to decline. Specifically, sales of the entire market in April 2023 reached only 22,409 vehicles, including 15,748 passenger cars; 6,487 commercial vehicles and 174 specialized vehicles. All segments saw a sharp decrease compared to March 2023, such as passenger cars down 27%; commercial vehicles down 19% and specialized vehicles down 51%.
If only counting VAMA members, sales fell even more sharply. Specifically, only 20,667 vehicles of all kinds were sold in April 2023, down 46% compared to April 2022 and down 21% compared to March 2023.
In a report sent to the local Department of Industry and Trade (Ministry of Industry and Trade), the Department of Industry and Trade of Vinh Phuc province said that Toyota Vietnam Company - a large FDI enterprise in the locality - had a 37% decrease in output in the first quarter of 2023, equivalent to a decrease of 2,802 vehicles compared to the first quarter of 2022. Sales decreased by 24%, equivalent to a decrease of 1,760 vehicles, and inventory increased by 347%, equivalent to an increase of 1,931 vehicles.
At a working session with the Ministry of Industry and Trade delegation this week, leaders of Vinh Phuc province asked the Ministry of Industry and Trade to recommend the Government to issue policies to develop the automobile and motorbike industry.
In the immediate future, consider continuing to reduce registration fees (RTF) for domestically produced and assembled cars to stimulate domestic consumption and production.
The People's Committee of Ninh Binh province, in a document sent to the Government and ministries and branches, also reflected that Thanh Cong's automobile production and consumption had decreased significantly: In January 2023, the consumption output reached only nearly 3,000 vehicles, a decrease of 4,939 vehicles (equivalent to 62.5%) compared to January 2021 and a decrease of more than 3,700 vehicles (equivalent to 55.8%) compared to January 2022.
Therefore, Ninh Binh province proposed to the Government and relevant ministries and branches solutions to support automobile manufacturing enterprises. Among them, there is a solution to reduce 50% of registration fees for domestically produced and assembled automobiles within a suitable period of time.
Previously, the Vietnam Automobile Manufacturers Association (VAMA) and a number of associations proposed postponing the payment of special consumption tax (SCT) in 2023 and reducing 50% of registration fees for domestically produced and assembled vehicles.
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