TAX RESCHEDULING PROPOSED TO SUPPORT LOCAL AUTOMOBILE INDUSTRY

The Ministry of Finance (MoF) has proposed rescheduling excise tax payments for local automobile manufactures and assemblers. The draft decree recommends that payments over VNĐ4.4 trillion (US$191 million) for October and November be delayed until late December.

Under the draft decree the payment deadline of the October excise tax, or special consumption tax, for domestically manufactured or assembled cars will be extended to December 20, while the November deadline will be extended to December 30, according to the MoF.

The draft decree was set up following the results of Decree No 109, which allowed local auto firms to enjoy excise tax payment extensions in 2020 to provide support for enterprises impacted by the COVID-19 pandemic.

To be entitled to the extension, local automotive firms will have to submit online or written applications for extensions to tax agencies when making excise tax declarations, in line with current regulations.

If the application is not submitted while making tax declarations, the firms will have to submit the applications before December 15.

If automotive firms, who were not subject to the incentive during the extension period, are found to have obtained an extension, they will have to fully pay their excise taxes and delayed amounts.

After the extension period, if tax agencies discover firms who are not subject to the incentive but still hold an extension, they will have to pay fines on top of fully paying their excise taxes and delayed amounts.

Most of the relevant ministries and agencies agree with the MoF's draft decree.

The Ministry of Foreign Affairs has agreed that it is essential to support businesses in overcoming the difficulties of the COVID-19 pandemic. By doing so, local automobile manufacturers and assemblers, as well as automobile joint-venture car makers and assemblers in Việt Nam, will benefit from the decree. This will allow them to gather more capital to maintain and expand their production.

The Việt Nam Chamber of Commerce and Industry (VCCI) has also come to a consensus on the extension policy to support businesses, as proposed by the Ministry of Finance. VCCI recognises that local automobile assemblers and manufacturers have played an important role in the country’s economic development. The manufacturers and assemblers have made great contributions to the State budget through the collection of all kinds of taxes and fees, as well as creating jobs for hundreds of thousands of people.

Successfully maintaining a domestic automobile industry will also be an opportunity to transfer advanced technologies to the local auto industry.

Source: VNS