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Vietnam Plans Tariff to Slow Imports
Sales of new passenger vehicles in Vietnam surged 62% to 70,000 units through the first eight months of 2015, the Financial Times reports.
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Sales of new passenger vehicles in Vietnam surged 62% to 70,000 units through the first eight months of 2015, the Financial Times reports.
More than half the country's cars are built locally, typically by domestic contract assemblers. But the 40% of the market held by imports has grown in recent years, mainly because of rising demand for foreign luxury cars by the country's business and political elite, according to the London-based newspaper.
This year's strong growth could slow in 2016, however. A new consumption tax that takes effect in January will impose tariffs on the cost of advertising, displaying and warranting all imported vehicles except buses.
The FT reports the tax will raise the price of imported cars as much as 12% without violating World Trade Organization rules prohibiting direct taxes on imports. The newspaper indicates the tariff is an effort to help local assemblers by damping competition caused by duty-free vehicles arriving from southeast Asian countries under terms of the ASEAN Trade in Goods agreement.
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