Tax up, imported cars down

17:10' 30/04/2008 (GMT+7)
The first Lamborghini LP640 imported into VN
VietNamNet Bridge – Nearly 3,000 cars were imported in April, a 50% drop off compared to March, reported the General Statistics Office.
The figure doesn’t include commercial cars and buses, only cars with 15 seats and fewer such as sedans, SUVs and MPVs. Importers brought 1,500 cars into Vietnam in the first half of April and around 1,400 in the second half.
According to the General Statistics Office, the volume of imported cars has decreased because of the new tax rates, 70%, which took effect on April 2, and 83%, on April 22.
“The number of imported cars will continue to fall due to the increase of tax,” said an official of the General Statistics Office.
The director of a big import company in HCM City said car traders imported a large volume of cars in late March to avoid the higher tax so they didn’t sign new contracts in April. However, the number of imported cars in April was equal to that of January and February because many contracts signed in March were carried out in April.
The Ministry of Finance’s moves (increasing import tax rates on cars twice within two months) has created unmeasurable changes. The first move (raising the tax from 60 to 70% on March 11) caused a record high number of imported cars, 6,000 units, which is equivalent to half of the whole 2007.
Tax changes have also created chaos in the market for imported cars by increasing the prices of all models by around 14.4%. For example, a Honda Accord was priced at $60,000 in February but it is $69,000 at present.