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General Department of Customs’ Import Export Duty Department deputy head Luu Manh Tuong said this was a periodical increase of customs sector relevant to enactment of a risk control process towards diverse commodities, including automobiles.
Particularly, this taxable price revision aims to provide a trustworthy source of data to customs officers in checking and dealing with improper price declarations of imported goods to curb trade frauds.
The soaring taxable prices of several kinds of brand-new and used luxurious vehicles inevitably made their retail prices more costly.
Thien Lam Company director Tran Thi Thanh Hoa said the tax rates of its latest batch of cars had spiked.
“Previously, the taxable value of a Toyota Venza was $21,000, now rising to $29,000 per unit, adding VND311.7 million in tax differences to a Toyota Venza. Similarly, a Lexus LS 460 formerly fetched $55,000 in taxable value now rising to 70,000, making a car unit VND644 million more expensive,” Hoa said.
With new tax rates it is certain firms will have to scale up their imported car retail prices which could slacken price advantages between cars imported by unauthorised dealers and those imported by genuine overseas manufacturers’/traders’ authorised dealers.
Industry insiders assumed this revision has mainly concentrated into brand-new cars that authorised dealers did not import and distribute in the Vietnamese market, particularly the Lexus brand which has yet to have any official distributor in Vietnam. Used car types with revised taxable values are also those not being imported by authorised dealers.
“This price revision mostly affects commercial firms, unauthorised dealers or individuals which need to remove assets when in Vietnam whereas authorised dealers are almost immune from the move as they follow transaction value regulations under the General Agreement on Tariffs and Trade (GATT),” said marketing director Nguyen Dang Thao at Euro Auto, an authorised dealer of BMW branded cars in Vietnam.
To shed some light on this, authorised importers of luxurious brands like Auto, BMW, Mercedes Benz and Porsche said their parent companies abroad gave exact car value figures to Vietnamese customs bodies, which are much higher than those declared by unauthorised dealers to customs officers for the same models.
“We incurred disadvantages for years when having to compete with unauthorised importers as their accepted declared [car] prices were lower than those set by overseas parent companies for car models imported by authorised dealers,” said director Tran Tan Trung at Lien A, an official distributor of Audi cars in Vietnam.