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Friday, July 26, 2024

Special consumption tax deferment proposed for local car manufacturers

By Thai Huy

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HCMC – The Ministry of Finance has proposed the Government defer the payment of special consumption tax (or excise tax) during the tax periods of June, July, August and September 2023 for domestically manufactured and assembled automobiles.

The ministry reported the above information to Prime Minister Pham Minh Chinh and Deputy Prime Minister Le Minh Khai on the excise tax deferment for local vehicle manufacturers.

As of March 15, 2023, 12 enterprises had submitted their requests for an extension of excise tax payment. The total deferred excise tax amount was VND9,603 billion in the same period. Meanwhile, the amount paid to the State budget reached VND8,871 and the balance was VND731 billion.

The total special consumption tax payable by the above 12 enterprises to the State budget in January 2023 was VND1,024 billion. Of which, the paid amount was VND1,008 billion and the balance would be VND15.9 billion.

Given the obstacles faced by local car manufacturers in the last quarter of 2022, such as rising loan rates, low credit limits and uncertainties of the financial market predicted for this year, the special consumption tax deferment would be necessary for the enterprises at this time, according to the ministry.

With the proposed excise tax payment deferral to the latest November 20, 2023, made by the Ministry of Finance, the estimated amounts payable would range from VND2,600 billion to VND2,800 billion per month, totaling VND10,400 billion to VND 11,200 billion in the proposed four tax periods.

This is the fourth time, following Decree 109 in 2020, Decree 104 in 2021 and Decree 32 in 2022, that the Ministry of Finance has sought the Government’s approval to defer the special consumption tax to help local car manufacturers’ businesses recover.

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