HCMC – The Ministry of Finance (MOF) has rejected a request to extend the 50% registration fee reduction for domestically manufactured and assembled automobiles until December 31, 2022.
On November 26 last year, the Government issued Decree 103/2021/ND-CP halving the registration fee for locally assembled and made automobiles, with effect until May 31, 2022. The fee cut came after the fourth wave of Covid-19 inflections had inflicted heavy damage on almost all sectors of the economy, including the automotive industry.
Just one month after the decree came out, December auto sales in the country soared 21% against the previous month at 46,759 units, according to data from the Vietnam Automobile Manufacturers’ Association (VAMA).
Auto sales growth continued into the first five months of this year, reaching 176,681 units, up 39% year on year. This means that during the six months of Decree 103 being in force, 223,440 autos benefited from the lower fee.
Regarding the proposal for a fee cut extension until the end of this year, the MOF said the fee reduction, if extended, would not be in line with the National Treatment Rules in the framework of the World Trade Organization, and with the free trade agreements (FTA) to which Vietnam is a signatory. Vietnam would be required to give an explanation by the member countries of the trade deals which do not have their companies making and assembling autos in the nation.
Covid has been brought under control and daily life has returned to normal. Therefore, the request for an extension of the auto registration fee cut is no longer appropriate, according to the MOF.