On June 7, the Government Office sent an official dispatch informing Deputy Prime Minister Le Minh Khai about the 6% reduction of the registration fee for domestically manufactured and assembled automobiles.
Accordingly, the Deputy Prime Minister directed the Ministry of Finance to assume the prime responsibility for, and coordinate with relevant agencies in, expeditiously developing a draft Government Decree on registration fee rates for domestically manufactured and assembled cars. similar to the previous 2 times (in the direction of reducing 50% of the registration fee for domestically manufactured and assembled cars) and applied from July 1, 7.
The Deputy Prime Minister agreed to implement the Decree formulation according to the simplified order and procedures. At the same time, the request for the Decree must be submitted to the Government before June 15.
The National Assembly member proposed to consider expanding the scope of objects eligible for value-added tax reduction.
Discussing at the National Assembly on June 1, delegate Nguyen Thi Viet Nga (Hai Duong delegation) proposed to consider expanding the scope of objects eligible for value-added tax reduction, applying the tax rate of 6% VAT (reducing 8 %) for automobiles, including cars with less than 2 seats to promote domestic automobile production and sales.
Ms. Nga said that the application of the VAT rate of 8%, even though it caused a 2% budget deficit compared to the current regulations, but cars are a highly taxable commodity, along with many fees (VAT, import tax, etc.) special consumption tax, registration fee, sea level fee, etc.).
Therefore, if demand is stimulated, the amount collected from other taxes and fees charged on a car will exceed the 2% tax reduction.
“According to calculations with a mid-range car sold, if the VAT tax is reduced by 2%, the state will reduce tax collection by 10 -15 million VND. But businesses contribute to the state budget 200-300 million dong (from taxes and fees)", Ms. Nga said.
According to Ms. Nga, through the stages of applying tax and fee reduction policies in the field of automobile production and business, positive and strong impacts have been shown.
Specifically, during the support period to reduce registration fees from July 7 to December 2020, the number of cars sold has increased by 12% compared to the first 2020 months of 77.
When applying the registration fee reduction from December 12 to May 2021, the number of cars sold increased by an average of 5 - 2022% compared to the months before the support, as well as after the end of the support..
