On June 7, the Government Office issued an official dispatch announcing the direction of Deputy Prime Minister Le Minh Khai on reducing registration fees by 50% for domestically produced and assembled cars.
Accordingly, the Deputy Prime Minister directed the Ministry of Finance to preside over and coordinate with relevant agencies to urgently develop a draft Government decree on registration fee collection rates for domestically produced and assembled cars. like the previous two times and applies from July 1, 2023.
Previously, to stimulate consumption and support domestic automobile manufacturing and assembling businesses, the Government twice reduced the registration fee rate for domestically produced and assembled cars by 50%, applying for the last 6 months of 2021 and the first 6 months of 2022.
The official dispatch also stated that the Deputy Prime Minister agreed to develop the decree according to simplified procedures and procedures. At the same time, request the decree to be submitted to the Government before June 15.
In a related development, at the discussion session in the National Assembly hall on June 1 discussing socio-economic issues, National Assembly delegate Nguyen Thi Viet Nga (Hai Duong delegation) proposed to include cars in the reduction of 2% value added tax (VAT), including cars with less than 24 seats, to promote the domestic automobile manufacturing and trading sector.
According to Ms. Nga, the reduction of taxes and fees in the field of automobile production and business shows the positive and strong impact of preferential policies on stimulating demand and developing this industry, helping automobile businesses. remove difficulties, stabilize production and business, ensure jobs for workers, contribute to creating growth momentum for the automobile industry thereby continuing to contribute back to the state budget as well as economic development.
When applying the registration fee reduction for the period of December 2021 - May 2022, the number of cars sold increased on average by 10 - 20% compared to the months before support, as well as after the end of support.
According to the delegate, although the application of VAT 8% causes a shortfall in budget revenue of 2% compared to the current one, cars are highly taxable items, subject to many taxes and fees (VAT tax, import tax, consumption tax). especially, registration fees, license plate fees...); Therefore, if demand is stimulated by reducing VAT for this item, the total tax collected from the car will still exceed the 2% VAT reduction.
“According to calculations, for a mid-range car sold, if VAT is reduced by 2%, the State will reduce tax revenue by 10-15 million VND. But businesses contribute 200 - 300 million VND to the State budget (from taxes and fees)," Ms. Nga said.
However, responding to delegate Nguyen Thi Viet Nga's comments, the Minister of Finance said that cars are subject to special consumption tax and are not within the scope of Resolution 43, so they are not eligible for reduction. tax because this policy focuses on tax reduction for essential sectors.
