Registration fees for domestically assembled cars may be reduced for 3 months

The above content is stated in Notice 384 dated August 15 of the Government Office on the draft Decree on registration fee rates for domestically produced automobiles. According to the notice, the Prime Minister had a meeting with Deputy Prime Ministers and leaders of relevant ministries and branches on this matter.

After the meeting, the Government Standing Committee agreed to reduce the registration fee for domestically produced and assembled cars by half. However, the plan for the time of application will be reduced for 3 months, instead of 6 months as previously planned.

The Government assigned the Ministry of Finance to complete the draft decree as soon as possible and submit it to the Prime Minister for signature and promulgation before August 18. In fact, the Prime Minister assigned the Ministry to complete this task in May, but in the proposed plan at that time, the financial management agency suggested that the Government consider not implementing the policy. The reason is that Vietnam has recently received many requests for explanation when the policy discriminates between domestically produced and assembled vehicles and imported vehicles.

In the dossier sent to the Ministry of Justice for appraisal on July 11, the Ministry of Finance still completed the policy of reducing 50% of registration fees for domestic vehicles as requested by competent authorities. However, the Ministry of Finance proposed that the Government assign the Ministry of Industry and Trade to review and propose a response plan in case Vietnam could be sued. It is estimated that the budget will lose about VND5,200 billion in revenue if this policy continues.

The Government has been implementing preferential registration fees for domestically produced and assembled vehicles for the past four consecutive years. This is considered a way to stimulate the market, helping to increase people's purchasing power when the market is facing difficulties. This incentive does not reduce the price of the vehicle but reduces the rolling cost.

Most car manufacturers and distributors are implementing many measures to stimulate demand in the context of slow market liquidity by reducing cash prices or supporting registration fees by 50-100%. As in previous times, when registration fee incentives are implemented, promotions from dealers or manufacturers are likely to be reduced in part or in full, depending on the actual market situation.