Vietnam Readies Tax Cuts on Small Cars

Small-car sales in Vietnam are expected to surge in July when reductions in the country’s luxury tax rate cut vehicle prices on such models by as much as $1,000, Thanh Nien News reports.

Cars with engines that displace fewer than 1.5 liters retail for 300 million-700 million Vietnamese dong ($13,500-$31,400) and are taxed at 45%. The rate will fall to 40% this summer and 35% in January 2018.

The small engines power about half of new cars sold in Vietnam, where the passenger vehicle market expanded 55% to 245,000 units in 2015, according to the news service. It says taxes on cars with engines larger than 3 liters will jump to 90%-150% in July.