Vietnam’s Ministry of Finance has asked relevant ministries, branches, and agencies for feedback on a proposal to cut half the registration fees for domestically manufactured and assembled cars.
The proposed tax cut would be effective from August 2024 until the end of January 2025.
The Ministry of Finance has previously implemented three six-month periods of a 50% reduction in registration fee rates for domestically produced and assembled cars from 2020 to 2023. These reductions have stimulated demand for cars in the market and supported economic development.
At the end of 2022, Vietnam had over 40 automobile manufacturing and assembling enterprises, with a total capacity of approximately 755,000 vehicles per year.
Foreign-invested enterprises account for about 35% of the industry, while domestic enterprises account for the rest. These companies collectively meet around 70% of the domestic demand for cars with fewer than nine seats. The domestic market demand is projected to reach approximately 800,000-900,000 vehicles per year by 2025.
The sales of vehicles fell in the first three months of 2024. According to the Vietnam Automobile Manufacturers Association (VAMA), sales by VAMA businesses during this period reached 58,165 vehicles, a 17% decline year-on-year.
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