Illustrative image (Source: intenret)Since July 2016 the tax has been just 15 percent, much lower thanthe rate on passenger cars.
There is also a big difference in another tax between the twovehicles - import tariff. It is a mere 5 percent on pick-ups imported fromASEAN member countries, while it is 30 percent on cars.
As for another major expense in buying a vehicle, registrationfee, it is only 2 percent of their cost on pick-ups whereas it is 10-15 percenton cars.
Pick-ups now come with lots of convenient features just likepassenger cars, and can be used for travelling in addition to carrying goodsand are capable of operating in various terrains, including rural andmountainous areas.
While sport utility vehicles (SUVs) with similar enginedisplacement cost in the billions, a pick-up can be bought for just 600-700million VND (26,595-31,028 USD).
To no one’s surprise, pick-ups have become favoured vehicles in Vietnam,resulting in a sharp increase in demand for them in recent years.
Most famous brand names from Japan and the US, like the MazdaBT50, Mitsubishi Triton, Toyota Hilux, Nissan Navara, Isuzi D-max, Ford Ranger,and Chevrolet Colorado, are in the market besides some lesser known names likethe UAZ Patriot from Russia.
Most are imported from Thailand, which is among the world’slargest pick-up manufacturing hubs.
According to the Vietnam Automobile Manufacturers Association,last year automobile sales reached 304,427 units following a year-on-yearincrease of 24 percent, of which pick-ups accounted for 23,099.
It put them in third position behind only small sedans and SUVs.
The low taxes and fees they enjoy have helped create “unfaircompetition” in the market, according to analysts.
They said pick-ups are now being used like small sedans and so itis only fair that they are taxed at the same rates as other cars.
The Government also thinks it is necessary to amend the taxes andfees to ensure fair play in the market.
The finance ministry has proposed hiking the special consumptiontax on pick-ups to a level equivalent to 60 percent of the rate on sedans withthe same engine capacity.
At this rate, most pick –up trucks, which have engines of 2,000-3,000cc, will attract a tax of 36 percent, more than double the current rate of 15 percent.
But there is opposition to this, with some analysts warning itwould affect the transport costs of many goods and services since 70 percent ofpick-up trucks are used for this purpose.
Many enterprises’ costs would increase at a time when they are onthe path to integrating with the regional and international economies, theypointed out. But it might be too late because though the plan to hike thespecial consumption tax is still under consideration, dealers have alreadyincreased prices by hundreds of millions.
The cost of a Ford Ranger pick-up has gone up from 619 million VNDto 859 million VND, and that of a Toyota Hilux from 650 million VND to 750million VND.
Market observers expect a dramatic drop in demand now sinceprospective buyers are likely to reconsider their plans.
In 2009, when the special consumption tax on the Toyota Innovaincreased from 30 percent to 45 percent, sales fell from 14,000 units the previousyear to 7,500.-VNA
VNA
