Proposal to reduce hybrid car tax, increase pickup truck tax to 60%

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After being first commented on by the National Assembly in the October 2024 session and continued to be discussed at the conference of specialized National Assembly deputies at the end of March 2025, the draft law has undergone notable changes. In particular, tax policies for hybrid cars and double-cabin pickup trucks are two controversial contents.

Eliminate distinction between internally and externally charged hybrid vehicles

One of the important new points of the draft is the removal of the distinction between internally-charged hybrid vehicles (HEVs) and externally-charged hybrid vehicles (PHEVs). Under the new regulations, all hybrid vehicles will be subject to a special consumption tax rate of 70% compared to vehicles using conventional internal combustion engines.

The draft Law on Special Consumption Tax (amended) proposes to reduce taxes on hybrid cars, but increase taxes on pickup trucks to 60%, double the current rate.

Thus, the draft has removed the previous regulation distinguishing between internally charged hybrid vehicles (HEV) and externally charged hybrid vehicles (PHEV). Instead, it is a general application method, expected to be assigned to the Government for research and specific regulations.

According to records, many car manufacturers are currently making great efforts to promote the consumption of hybrid cars because this is a green car that is suitable for the trend of switching to low-emission vehicles. However, the selling price of this car line is often about 15% higher than that of conventional cars. Total hybrid car sales in 2024 of the manufacturers reached 9,866 cars, accounting for 0.2% of the automobile market share.

Reduced budget revenue but long-term benefits

Assessing the tax policy for hybrid vehicles, Mr. Nguyen Ngoc Thai - Deputy General Director of KPMG Tax and Consulting LLC said that tax reduction could reduce the State budget by about 5,000 billion VND per year.

However, this is an acceptable cost compared to the long-term benefits this policy brings.

Currently, hybrid vehicles (HEVs) are proposed to have a tax rate of 70% and plug-in hybrid vehicles (PHEVs) is 50% compared to gasoline vehicles.

According to research by KPMG Vietnam, tax reductions will help save up to VND26,000 billion in fuel costs and VND28,000 billion in crude oil import costs over the life of hybrid vehicles. This will not only help reduce pressure on the State budget but also contribute to improving Vietnam's trade balance.

Regarding tax policy, Ms. Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consulting Association, said that hybrid vehicles (HEV) are currently being proposed to have a tax rate of 70% and plug-in hybrid vehicles (PHEV) is 50% compared to gasoline vehicles. However, Ms. Cuc believes that these two types of vehicles should enjoy the same tax incentives, at 50%.

National Assembly delegate Phan Duc Hieu, from the National Assembly's Economic and Financial Committee, also supported the proposal to impose a 50% tax on hybrid vehicles , regardless of configuration type. "In my opinion, we need a tax policy that is attractive enough to change consumer behavior," Hieu said.

Source: https://khoahocdoisong.vn/de-xuat-giam-thue-oto-hybrid-tang-thue-xe-ban-tai-toi-60-post267884.html