ASEAN KEY DESTINATIONS
Vietnam: Car registration fees to go dearer by15%
Vietnamese Prime Minister Nguyen Tan Dung on July 29 signed a decree to raise car registration fees to up to 15 percent of a vehicle's purchase price, reported VNA.
The decree was issued in an attempt to reduce traffic in urban areas and curb the countrys soaring trade deficit.
Cars with les than 10 seats will have their fees raised from the current 5 percent to 10-15 percent of the purchase price, depending on the area.
The decree removes the current regulation restricting registration fees for each vehicle to a maximum of 500 million dong ($30,000).
The fee for cars with more than 10 seats, trucks and motobikes remains unchanged at 2-5 percent.
With the hike, Huynh Du An, general director of Euro Auto, BMWs distributor, estimated that clients would have to pay a registration fee of nearly $12,000 over the current $8,000 for a BMW that costs $79,900 in Hanoi and Ho Chi Minh City. The fee for clients registering in other cities and provinces will also rise to nearly $8,000 against the current $4,000.
Domestic authorities expect the move will limit new car registrations, thereby reducing traffic. The Ministry of Finance (MoF) is also considering raising import taxes for cars to reduce traffic and the trade deficit, which stood at US$15 billion in the first seven months of the year.
In April, the Government raised the car import tax to 83 percent from 70 percent.
Auto sales surged in Vietnam in recent years amid robust economic growth. According to data published by the Vietnam Automobile Manufacturers Association, 17 auto makers in Vietnam sold a combined 68,609 vehicles in the first half of this year, up 141 percent year-on-year.
In June alone, car sales in the country were up by 60 percent year-on-year to 9,749 units, the association said. There are an estimated 1.2 million cars in the country of 86 million people.
According to the MoF, registration fees are an important source for the State budget. The country in the 2001-06 period collected more than 2 trillion dong ($121 million) annually from the fees, accounting for 1.57 percent of the nations total State budget collection.