Vietnam Ponders 30% Hike in Car Tax

Vietnam's Ministry of Finance is proposing changes in its luxury tax on cars that could raise prices as much as 30%, carmakers say.

The ministry plans to increase the existing consumption tax next Jan. 1 to a range of 15%-60% based on the vehicle's retail price. The current tax is imposed on a vehicle's wholesale freight price.

Importers and local vehicle assemblers predict higher fees will hurt demand for all, according to Thanh Nien. The newspaper says Vietnam's auto industry also worries about an expected flood of duty-free cars from other southeast Asian countries when a regional trade agreement takes effect in 2018.

The Japan Business Assn. in Vietnam says the country's carmakers sold 157,800 vehicles last year, and imports doubled to 72,000 units. The group reports that 45,000 vehicles were imported in the first five months of 2015.