Local car makers have requested the government to extend tax incentives saying the industry needs more time to fully recover, local media reported Monday.
The car market would face a sharp decline next year if the incentives were withdrawn, the Vietnam Automobile Manufacturers’ Association said in a proposal, according to online newspaper VnExpress.
The government put in place incentives, including cuts in taxes and registration fees, to boost buying and help local car makers cope with the economic downturn. But starting next year, consumers will no longer enjoy the 50 percent cut in value-added tax in place since February. Vehicle registration fees of 10-12 percent were cut in half in May and they are also slated to return normal again in January 2010.
Auto sales in Vietnam surged 104 percent in September from a year earlier to 11,071 units, according to a report by the automobile association. Still, cumulative sales from January to September dropped 12 percent from the same period last year.
But online newspaper VietNamNet said it is likely that the government would not accept the request of car makers.
At a recent conference, the Finance Ministry had said the tax and fee incentives for the car sector should end this year as planned. In its proposal for stimulus measures next year, the Ministry of Investment and Planning also said tax breaks should not be extended to next year.
Source: TN, Agencies