Tariff cuts likely on ASEAN cars

HA NOI — The Ministry of Finance is considering a draft schedule of tariff reductions for automobiles imported from ASEAN countries during 2012-14.

Under the draft schedule, an import tax rate of 70 per cent would be imposed in 2012 on all passenger cars that are completely-built-units (CBUs) imported from ASEAN states. The tax rate would be reduced to 60 per cent in 2013 and 50 per cent in 2014. Special vehicles such as ambulances would enjoy a zero tax rate while trucks would face a 5 per cent tax rate over the next three years.

Meanwhile, the tax rate for auto parts imported from ASEAN states would be zero per cent.

The schedule would also address import taxes imposed on motorbikes and mopeds, imposing a tax of 75 per cent in 2012, with the rate to fall to 60 per cent in 2013 and 50 per cent in 2014. All motorbikes with an engine capacity of 150-250 cc, as well as all-terrain vehicles, would be subject to a 5 per cent tax rate over the next three years.

The ministry has also been gathering opinions from relevant bodies concerning tariff rates for a number of other commodities imported from ASEAN nations, including condensed milk, yoghurt, raw cream, flour, fruit juice and vegetable oil – which would all tentatively face tax rates ranging from zero to 5 per cent.

Imports of coal, quartz and crude oil would be tax exempt, while the ministry has proposed a tax rate of 20 per cent for petrol (RON 97 and RON 90) and 5 per cent for diesel and other types of fuel.

An official of the General Department of Customs said that the schedule was being prepared pursuant to the ASEAN Trade in Goods Agreement (ATIGA) and World Trade Organisation (WTO) commitments. The ATIGA, which took effect in May 2010, requires ASEAN nations to completely remove taxes on imported goods from member states by 2015.

ATIGA is also based on provisions in the ASEAN Free Trade Agreement (AFTA), requiring all goods to have a zero tax rate by 2015.

Import tax rates during 2012-14 would be applied on goods imported from nine ASEAN countries, including Brunei, Cambodia, Indonesia, Myanmar, Malaysia, Singapore and Thailand.

October 11, 2011

Source: VNS