Want to be in the loop?
subscribe to
our notification
Business News
LOCAL AUTO FIRMS EXPECT EXTENSION FOR EXCISE TAX PAYMENT
The total amount of special consumption tax (SCT) or excise tax on domestically manufactured and assembled automobiles, proposed for payment extension from June, July, August and September of 2023, is estimated at VND10,400 - 11,200 billion.
The Ministry of Finance recently sent a report to the Prime Minister and Deputy Prime Minister Le Minh Khai on the implementation of Resolution 31/NQ-CP dated March 7, 2023. The ministry assessed consumption-based options and the amount of excise tax paid by domestic automobile manufacturing and assembling companies.
In 2020-2022, to support and recover production and business operations negatively affected by the COVID-19 pandemic, the Ministry of Finance submitted to the Government for promulgation Decree 109/2020/ND-CP dated September 15, 2020, Decree 104/2021/ND-CP dated December 4, 2021 and Decree 32/2022/ND-CP dated May 21, 2022 that specify the extended deadline for SCT payment for domestically manufactured and assembled automobiles.
Regarding Decree 32/2022/ND-CP, 12 companies applied for an extended deadline for VND9,603 billion of special consumption tax cumulatively to March 15, 2022, including VND1,906 billion in June, VND2,564 billion in July, VND2,760 billion in August and VND2,371 billion in September. The total amount of paid tax was VND8,871 billion while the remaining unpaid amount was VND731 billion.
The payable amount of special consumption tax in January 2023 was VND1,024 billion, of which VND1,008 billion was paid and VND15.9 billion was unpaid.
Regarding the extension of special consumption tax on domestically manufactured and assembled automobiles in 2023 in accordance with Resolution 31/NQ-CP, the Ministry of Finance pointed to two cases. In case of no extended SCT payment for eligible carmakers, Vietnam will comply with the national treatment principle of the World Trade Organization (WTO) and free trade agreements (FTAs), including the Vietnam-EU Free Trade Agreement (EVFTA). However, according to some provinces, associations and enterprises, the market of domestically manufactured and assembled automobiles may face difficulties and challenges such as rising bank interest rates, credit crunch in the fourth quarter of 2022 and the likelihood of financial and credit difficulties in 2023.
In the case of extension, all 12 automobile manufacturers and assemblers in the country that experienced tough difficulties and huge challenges due to the epidemic outbreak managed to revive thanks to proper government-backed policy support. In addition, in recent months, the amount of special consumption tax on domestically manufactured and assembled automobiles has been falling.
In October 2022, the declared output was 25,571 vehicles, which were levied with a total excise tax of VND3,884 billion. In November, a total of 23,658 vehicles were made and imposed a total excise tax of VND3,412 billion, down VND472 billion from the previous month. In December, the tax amount was VND3,218 billion, down VND194 billion from the previous month. In January 2023, the tax was VND1,442 billion, a sharp decline of VND1,776 billion month-on-month, subject to 9,766 vehicles. If the long public holiday in January was excluded, the excise tax declared in January 2023 would still fall by about VND200 billion.
Thus, the Ministry of Finance believed that it is necessary to continue supporting domestic automobile manufacturers and assemblers to recover and expand their business operations as proposed by some provinces, associations and enterprises. Moreover, when the deadline is over, they will still have to pay tax in full to the State Budget. However, if the extension continues, it may create concerns and reactions from partners regarding the WTO's national treatment principle and FTAs that Vietnam is a signatory, including EVFTA. Therefore, the extension period should not be prolonged.
Based on these analyses and assessments, the Ministry of Finance proposed a plan to extend the excise tax payment for domestic automobile manufacturers and assemblers as per Decree 32/2022/ND-CP. Accordingly, the deadline will be extended for payable excise tax on domestically manufactured and assembled automobiles arising in June, July, August and September 2023. The deadline for paying excise tax in these four months (tax periods) is November 20, 2023.
The total excise tax on domestically manufactured and assembled automobiles, proposed for extension of four tax periods, is forecast at VND10,400 - 11,200 billion. If approved by the Government, the Ministry of Finance will submit a decree to this effect to the Government.
Source: VCCI
Related News
![Card image cap](/uploads/Logo/Cathay%20%281%29.jpg)
EXPLORE HONG KONG WITH A COMPANION
From now until 19 August 2024, you can enjoy our exclusive Fly 2 Hong Kong offer on round-trip Economy flights from USD364^ for 2 persons, sponsored by Hong Kong International Airport. Bring along a travel buddy and experience together the excitement and charm of our vibrant home city.
![Card image cap](/uploads/news/Factory%201.jpg)
BUSINESSES INCREASE WISHES FOR SPECIALISED INDUSTRIAL PARKS
Data centres, industrial parks (IPs) reserved for high-tech production, and parks serving Chinese, the United States, Taiwanese, or Japanese investors are gradually being formed to welcome new funding waves, according to Truong An Duong, general manager of North Vietnam and Residential at Frasers Property Vietnam.
![Card image cap](/uploads/news/economic.jpg)
VIETNAM’S H1 ECONOMIC GROWTH QUITE IMPRESSIVE: ADB COUNTRY DIRECTOR
Country Director of the Asian Development Bank (ADB) for Vietnam Shantanu Chakraborty has expressed his impression of the Southeast Asian nation’s economic growth of 6.4 per cent in the first half of this year. The growth was mainly driven by strong trade recovery, where export grew by 14.5 per cent and import by 17 per cent over last year, he told the Vietnam News Agency. However, he said, the domestic segment remained sluggish.
![Card image cap](/uploads/news/Infrastructure13.jpg)
REAL ESTATE FIRMS AGGRESSIVELY RESTRUCTURING BOND DEBT
From the start of 2024 to July 5, the market saw 133 private placements and ten bond public offerings, totalling over VNĐ140 trillion. 65.6 per cent of this value was from the banking sector, while real estate bonds accounted for only 24.6 per cent, or over VNĐ34.5 trillion.
![Card image cap](/uploads/news/Eco2.jpg)
GOV’T UNVEILS ACTION PLAN TO ACCELERATE INDUSTRIALISATION
Vietnam aspires to become among the top three industrial powerhouses in ASEAN, with the industrial sector contributing over 40 per cent to GDP. The manufacturing and processing sector is expected to account for around 30 per cent of GDP, with a strong emphasis on high-tech products aiming for over 45 per cent of the sector's value. To further drive the economy, the service sector is projected to contribute over 50 per cent to GDP, with tourism alone generating 14-15 per cent.
![Card image cap](/uploads/news/Industrial%20Zone.jpg)
VIỆT NAM TARGETS FULL MOBILE BROADBAND COVERAGE ON HIGHWAYS, INDUSTRIAL ZONES BY 2025
By 2025, Việt Nam aims to achieve one hundred per cent mobile broadband coverage on all national highways, expressways and railways under a plan to enhance the quality of Việt Nam’s mobile telecommunications network by 2025, which has been approved by the Ministry of Information and Communications (MIC).