~ Le Viêt Nam, aujourd'hui. ~
The Vietnam News

Year :      [2006]      [2005]      [2004]      [2003]      [2002]      [2001]      [2000]      [1999]      [1998]      [1997]

Vietnam plans to impose heavy import taxes to limit used cars

HANOI - Vietnam plans to levy excise taxes on imported used cars of up to four times their value, in hopes of avoiding a flood of automobiles on the country's already-packed roads, officials said Monday.

The special taxes would add some 28,000 dollars to the price of a used Toyota Camry that might sell for just 5,000 dollars outside Vietnam, according to Nguyen Van Phung, deputy director of the Tax Policy Department.

Vietnam announced last month that the country would for the first time the open the door to importing pre-owned vehicles on May 1, to fulfill its requirements for entering the World Trade Organization (WTO), which the government hopes will happen later this year.

But his week, Hanoi previewed a special-tax scheme for the used cars, using a sliding scale based on engine size that would also see an average used Land Cruiser normally worth around 10,000 dollars paying total taxes of 41,500 dollars. "If we didn't have to conform to WTO regulations, we would still keep the ban on the import of used cars," Phung said.

The government's proposed "absolute tax" would in effect limit the demand for used cars by making them more expensive, though Phung said the taxes are allowed under WTO rules allowing countries to levy taxes to protect the environment. "I don't want to say that this measure is to limit importing used cars, but it will help keep the environment clean from being polluted by too many used cars," Phung said. "Applying a high tax is for the sake of the 83 million Vietnamese people."

In fact, congested roads are just as likely a reason for Vietnam's reluctance to open the door too wide to used automobile imports. Motorbikes now outnumber cars 20 to 1 in Vietnam, but their numbers have more than doubled to 14 million in the past five years with the country's economic growth averaging 7-8 per cent.

Roads are already clogged with motorbikes, especially in large cities like Hanoi and Ho Chi Minh City, and the infrastructure is already close to gridlock with only 600,000 registered automobiles registered. New car sales, even limited by 100-per-cent import taxes, have been holding steady at around 40,000 units per year. Because cars take up more space on narrow roads, the government is concerned that allowing in cheap used vehicles will fuel an explosion in demand and exacerbate already chaotic traffic.

Earlier this year, the government announced it would no longer provide cars for officials because of traffic concerns.

Deutsche Presse Agentur - March 27, 2006.