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Wednesday, June 19, 2024

VAMA proposes lower tax on hybrid cars

By D. Hai

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HCMC – The Vietnam Automobile Manufacturers’ Association (VAMA) has written to the Government proposing lowering the excise tax and registration fee on hybrid electric and plug-in hybrid electric vehicles.

The proposal is aimed at encouraging residents to use hybrid vehicles rather than fossil fuel-powered cars to protect the environment.

Vietnam’s traffic infrastructure is assessed as practical for the development of hybrid vehicles which are able to run in a long haul and emit a low volume of carbon dioxide while charging stations do not require much investment, according to VAMA.

In early 2022, the National Assembly decided to cut the excise tax on electric vehicles with fewer than nine seats to 3% from 15%. The tax reduction took effect in March 2022, for five years. After March 2027, these vehicles will be subject to the 11% excise tax.

Meanwhile, hybrid vehicles are yet to be entitled to the reduction, but are subject to the excise tax of 15% and the registration fees of 10%-12%.

After the hybrid vehicles are entitled to the lower excise tax and registration fee, their prices will be revised down, attracting customers and stimulating firms to invest in hybrid cars and charging stations, said VAMA.

The incentives and tax reduction on electric vehicles and hybrid cars might be phased out and will be stopped after 2050, when these vehicles account for a large proportion in the local market.

In addition, the association proposed the Government approve an auto industry development strategy in the new normal as soon as possible and build a legal corridor to encourage automakers to apply new technology to their production to fulfill the target of net zero emissions by 2050.

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