Ministry raises tax on second-hand cars

Vietnams Finance Ministry issued a decision to raise tax on second-hand cars imported into the country, in an effort to further contain a surge in vehicle imports. Car importers said that the previous tax increases of US$300-3,000 per unit on used cars effective April 2, 2008 have really closed off all ways for used cars to enter Vietnam. Previously, Ha Huy Tuan, head of the tax policy department under the finance ministry, explained that there was still room for the tax hike under Vietnam’s WTO commitments, which is capped at 95%. Vietnam can be flexible in changing the tax rate within the permissible range, he said. According to the General Department of Statistics, in the first four months, the trade gap in the country was US$11.07 billion, up 3.8 times year-on-year. (May 13, 2008)