The above suggestion was announced by the MoIT’s deputy minister Phan Thi Thang in a written document sent to the Ministry of Finance for consideration on April 25.

In the document, the MoIT said that the risk of economic turmoil had had a great impact on businesses, including domestic automobile assemblers and manufacturers. In addition, pressure from tightened credit policy, high interest rates, and market liquidity problems also have influence on consumer psychology as many people have decided to tighten their spending.

Workers assemble an automobile at Ford Vietnam's Hai Duong assembly facility.

In the first three months this year, Vietnam Automobile Manufacturers Association (VAMA) members sold a total of nearly 77,090 units, down 31% compared to the same period last year.

By the end of March 2023, the sales of domestically-assembled cars decreased by 34% while the number of imported cars dropped by 4% compared to the same period last year.

After seeing a decline in sales of most car manufacturers in the first quarter, car manufacturers and dealers have applied preferential and promotional policies that focus on supporting registration fees or cutting prices for car buyers to stimulate demand. However, sales volumes have remained far below expectation.

To assist businesses in stabilising their production and maintaining revenue, the MoIT strongly believes that it is essential to cut registration fees for domestically- manufactured and assembled vehicles until the end of 2023.

Months ago, VAMA and the Vietnam Association of Mechanical Industry (VAMI) asked the Government to halve the registration fee for locally assembled or manufactured cars during the first half of the year to boost market demand.

The two associations also jointly asked for an extension of the deadline to pay the excise tax. Both policies should be imposed in the first quarter or early second quarter 2023.

The Government then requested the Ministry of Finance to consider conducting a plan for a car registration fee cut. However, the Ministry of Finance rejected the request for the 50% registration fee reduction for domestically manufactured and assembled vehicles for fear of affecting local budget revenue and violating international commitments.

Regarding the extension of the excise tax payment, the Ministry of Finance has planned to extend the deadline to pay the excise tax for domestically-manufactured and assembled vehicles.

The Ministry of Industry and Trade agreed with the plan and asked the Ministry of Finance to allow an extension for excise tax payment in October 2023 instead of applying for the payable excise tax arising in the June, July, August, and September tax period only.

Source: VNA