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Tax on imported cars, motorbikes proposed   2011-06-04 - VNS

Traffic congestion on Nguyen Trai Street in Ha Noi's Thanh Xuan District. Increasing imports of cars and motorbikes are viewed as one of the leading causes of the growing traffic problem in the nation's cities. – VNA/VNS Photo Anh Tuan.

Traffic congestion on Nguyen Trai Street in Ha Noi's Thanh Xuan District. Increasing imports of cars and motorbikes are viewed as one of the leading causes of the growing traffic problem in the nation's cities. – VNA/VNS Photo Anh Tuan.

 The Viet Nam Association of Financial Investors (VAFI) is proposing that the Government impose a new tax on automobiles and motorbikes in order to reduce traffic congestion as well as the nation's trade deficit.

VAFI general secretary Nguyen Hong Hai said that the Ministry of Finance should consider a new tax on automobiles and motorbikes in addition to current import taxes, special consumption taxes and value-added taxes, excluding only low-cost motorbikes which are popular in rural areas and vehicles used in public transportation.

Increasing imports of cars and motorbikes were one of the leading causes of the growing traffic problem in the nation's cities, Hai said, suggesting the new levy should be set high, at two to 10 times the value of the vehicle.

"The State would be able to both reduce the number of cars on the road and cut in half the import value of automobiles and auto parts," Hai said. "The money collected from the fee could then be used to improve roads and public transportation."

It was unreasonable for individuals to be enjoying the luxury of a car when the country was facing congested roads, pollution, a massive trade deficit and a shortage of foreign currency, he said.

"The tax is necessary now."

In a letter sent to the ministries of Finance, Transport, and Industry and Trade, VAFI also requested the Ministry of Industry and Trade to stop licensing new automobile and motorbike assembly plants.

"Viet Nam now has sufficient automobile and motorbike assembly capacity to meet the needs of the domestic market," the letter said.

Hai also noted that, while manufacturers enjoyed tax breaks for domestic production, they had failed to increase the ratio of local content in the vehicles they produce.



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