Some car importers have threatened to file claims about the recent decision by the Ministry of Finance (MOF) to raise the car import tax, Decision No 17, as the immediate effect of the decision has pushed them to the wall.

 

“MOF’s decision has made a surprise attack on us,” car importers told mass media.

 

 

Under the current laws, all legal documents promulgated by ministries, including MOF, become valid 15 days after the documents are published in the official gazette.

 

Decision No 17, which stipulates that the car import tax will be raised from 70% to 83%, says that the decision will become valid 15 days after it is published in the official gazette. However, the Decision itself also states that it will become effective on April 22, 2008, or one day after the decision was signed.

 

It is difficult to explain why there are two contradictory contents co-existing in a document of MOF, the ministry which always leads other ministries and branches in the number of documents issued every year.

 

Le Thanh Ha, Director of Nhat Duc Auto, specialising in trading cars imported from Europe and North America, said that the main subject of the decision is car importers, but car importers only read about the new decision on the afternoon of April 21 in the newspaper.

 

Many car importers, who had imports arriving in ports, could not do anything to clear the imports in the short afternoon on April 21, before the decision came into effect on April 22, in order to enjoy the previously applied tax rate.

 

Ho Khac Hung, Director of MAST, which trades Hyundai and Ssangyong brand name imports, said: “The unexpected decision has pushed us into a dilemma.”

 

Ha from Nhat Duc Auto said that he and other car importers are ‘sitting together to discuss the decision’ and they may petition the MOF about the legitimacy of the Decision 17.

 

He stressed that though the government is trying to curb inflation and reduce the trade gap, it should not take measures which shock businesses. The behaviour of MOF has created a risky business environment, a result of which is that businesses lose confidence in the ministry and state management agencies.

 

No businessman feels secure doing business in an environment in which legal documents change all the time and he cannot draw up his business plan.

 

Car prices have been skyrocketing on the domestic market since the tax was raised on April 22.

 

Toyota Camry 2.4L, which was priced at $50,000, is now selling at nearly $60,000. Honda Accord, which was priced at $53,000, is now selling at $60-66,000. Car dealers say that car prices will see further increases of $2-3,000 in one or two weeks.

 

Kia Morning, which was selling very well thanks to its soft prices, has increased by $2-3,000/unit. Hoai Son, Business Director of ITCR Company, said that the price will be $23-24,000/unit in some days.

 

Despite the price increases, customers still have to purchase expensive import cars, because they don’t want to wait to get deliveries if they buy locally made cars.

 

However, car dealers worry that customers will not buy cars if prices further increase. Sources say that MOF is also considering raising the luxury tax on cars, possibly by 10-15%.

 

(Source: Dan tri, VNE)

Related Posts