Workers assemble a car at a Toyota factory in Vietnam. (Photo tapchitaichinh.vn)Hanoi (VNS/VNA) - More than half a billion dollars in tax returns havebeen awarded to firms since 2017 in a bid by the Government to boost thecountry's auto industry and supporting industry, according to deputy directorof the General Department of Vietnam Customs Luu Manh Tuong.
The tax incentives are in line with Government Decision 57/2020/NĐ-CP, apolicy package aimed at bolstering the development of the auto industry in thenext four years, he said.
While the tax returns may have hurt the State's budget collection in the shortrun, the benefits of growing the auto and supporting industries would bemore than enough to make up for it in the near future. The incentive wassaid to have secured more jobs, attracted more foreign investment and created aripple effect in the development of the country's industrial sector.
Nguyen Trung Hieu, a representative from the Vietnam Automobile Manufacturers'Association (VAMA), said the policy package gave the auto industry amuch-needed boost to catch up with the competition in Southeast Asia.
Hieu said the auto industry remained a large contributor to the State's budgetwith billions of dollars in revenue and also employed hundreds ofthousands of workers.
Luong Duc Toan, deputy head of the department of industrial manufacturing underthe Ministry of Industry and Trade, said the auto industry had seen major leapsforward in recent years. By the end of 2019, Vietnam was home to more than 40auto manufacturers with several world-leading brands including Ford, Mercedesand Toyota. Domestic production had been able to supply up to 70 percent oflocal demand for nine-seater or smaller vehicles while made-in-Vietnam productshad found their way to markets in the region such as Thailand and thePhilippines.
However, there were still shortcomings in the auto industry, Toan said, asthe industry remained entirely dependent on a few global corporations. Inaddition, domestic firms possessed no technologies for the production of keyauto parts such as engines, control systems and transmission gears.
As a direct result of the absence of a large network of auto parts suppliers, Vietnam’slocalisation rate was poor compared with other countries in the region./.
VNA
