Extension of payment of special consumption tax on domestically produced cars until November 20, 2023

On May 12, the Ministry of Finance prepared a dossier on the Government's Decree on extending the deadline for paying special consumption tax (SCT) on domestically manufactured and assembled automobiles according to a simplified procedure and sent it to the Ministry of Justice for appraisal.

Domestic automobile production is facing difficulties. Photo: Hoang Ha

Currently, there are a total of 12 automobile manufacturing and assembling enterprises nationwide. The Ministry of Finance notes: The output and special consumption tax on domestically manufactured and assembled automobiles are gradually decreasing.

From October 2022, the declared output was 25,571 vehicles with the corresponding special consumption tax of VND 3,884 billion. By November 2022, the declared output was 23,658 vehicles with the corresponding special consumption tax of VND 3,412 billion, a decrease of VND 472 billion compared to the previous month. In December 2022, the special consumption tax incurred was VND 3,218 billion, a decrease of VND 194 billion compared to the previous month. In January 2023, the special consumption tax incurred was VND 1,442 billion, a decrease of VND 1,776 billion compared to the previous month, with the corresponding declared output of 9,766 vehicles.

If excluding the factor due to long holidays (because January is the Lunar New Year month), the amount of special consumption tax declared in January 2023 also decreased by about 200 billion VND compared to the previous month.

The People's Committees of Quang Nam and Ninh Binh provinces and the Association of Domestic Automobile Manufacturing and Assembly Enterprises predict that the domestic automobile manufacturing and assembly market may face difficulties and challenges such as increasing bank interest rates, low credit limits arising in the fourth quarter of 2022 and predictions of a difficult situation for the financial and credit markets in 2023.

"Thus, it is necessary to continue supporting domestic automobile manufacturing and assembly enterprises to recover and develop production and business. Furthermore, after the extension period, automobile manufacturing and assembly enterprises must pay full tax to the state budget," the Ministry of Finance stated.

The Ministry of Finance submits to the Government the proposal to: Extend the tax payment deadline for the amount of special consumption tax payable arising from the tax calculation period of June, July, August and September 2023 for domestically manufactured or assembled automobiles. The extension period is from the end date of the special consumption tax payment deadline according to the provisions of the law on tax administration.

Specifically:

+ The deadline for paying special consumption tax arising from the tax period of June 2023 is no later than November 20, 2023.

+ The deadline for paying special consumption tax arising from the July 2023 tax period is no later than November 20, 2023.

+ The deadline for paying special consumption tax arising from the tax period of August 2023 is no later than November 20, 2023.

+ The deadline for paying special consumption tax arising from the tax period of September 2023 is no later than November 20, 2023.

"The proposal to unify the extension period to November 20, 2023 is to avoid accumulating payable amounts for enterprises at the end of the year and avoid affecting the completion of the State budget revenue estimate in case enterprises encounter financial difficulties," the Ministry of Finance explained.

The results of the implementation of the extension of special consumption tax on domestically manufactured and assembled automobiles according to Decree No. 32/2022/ND-CP accumulated up to March 15, 2023 are as follows:

- The total number of applications for extension of special consumption tax is 12 enterprises with the total amount of special consumption tax extended according to the declaration is 9,603 billion VND (of which June 2022 is 1,907 billion VND; July 2022 is 2,564 billion VND; August 2022 is 2,761 billion VND; September 2022 is 2,371 billion VND).

- The total amount of special consumption tax paid to the state budget is VND 8,871 billion (of which June 2022 is VND 1,898 billion; July 2022 is VND 2,190 billion; August 2022 is VND 2,538 billion; September 2022 is VND 2,245 billion).

- The remaining special consumption tax payable to the state budget is 731 billion VND.

According to the Ministry of Finance, the amount of special consumption tax paid in the first 3 months of 2023 (accumulated to April 21, 2023) of 12 domestic automobile manufacturing and assembling enterprises: The total amount of special consumption tax payable is 4,282 billion VND (of which January: 1,024 billion VND, February: 1,408 billion VND, March: 1,848 billion VND), the amount of tax paid is 3,624 billion VND (of which January: 1,008.2 billion VND, February: 1,393, March: 1,223 billion VND), the total amount of tax remaining to be paid is 657 billion VND.

With the automobile market in sharp decline, associations and localities have proposed that the Government extend the payment of special consumption tax and reduce 50% of the registration fee for domestically produced and assembled cars this year to stimulate demand.

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