Gov’t mulls over renewal of duty incentive scheme for automotive manufacturers
VGP – Deputy Prime Minister Le Van Thanh has assigned the Ministry of Finance to coordinate with relevant agencies to review the implementation of the duty incentive scheme for automotive manufacturers introduced in 2017.
Based on the review outcomes, the ministry will put forward amendments and supplements to and extension of the scheme for the next stage starting from 2022.
The Government issued Decree No. 125/2017/ND-CP (Decree 125) dated November 16, 2017 amending a certain number of articles of the Government’s Decree No. 122/2016/ND-CP dated September 1, 2016 on export duty schedule, preferential import duty schedule and lists of commodities and their flat tax rates, compound tax rates and outside tariff quota rates.
Decree 125 covers the duty incentive scheme for automotive manufacturers applicable from November 16, 2017 to December 31, 2022.
On May 25, 2020, the Government promulgated Decree No. 57/2020/ND-CP amending and supplementing a number of content of the duty incentive scheme in accordance with the reality of the automotive industry in the context of the COVID-19 pandemic.
Viet Nam’s automotive industry has grown significantly in recent years thanks to the country’s fast-growing middle class.
The average growth rate of domestically assembled vehicles was approximately 10 percent per year in the 2015-2018 period.
The sector, which accounts for three percent of the nation’s GDP, is facing increasingly fiercer competition as Viet Nam has committed to opening its market to imported cars under free trade agreements, prompting the need to extend the implementation of the duty incentive scheme to support domestic automotive production.
The scheme should be renewed at least one year before it takes effect to help local automotive manufacturers to have enough time to develop business plans, suggested the authorities of the northern province of Hai Duong where Ford Viet Nam's automobile assembly and production factory is located./.
By Quang Minh