The import of new and used cars will face new tax rates as of June 1 in accordance with a recent product management list issued by the General Department of Customs aimed at curbing trade fraud.
Most famous imported brands like Acura, BMW, Mercedes, Audi, Aston Martin Bentley and Cadillac were included on the price adjustment list.
This is the second time since earlier this year that the General Customs Department has supplemented and modified tax rates related to imported cars that, dependent on make, will face taxes from US$500 to several thousand US dollars.
The General Department of Customs published its first black list of 23 car importers in 2004 to recollect tax due from evasion. By late 2007, the Customs transferred its entire set of records related to import tax evasion to the police who are currently concluding their investigations.
In addition to issuing the list, the Customs has applied an array of techniques to control prices of imported cars, retention time of cars at ports and on site tax payments during customs declarations.
Meanwhile, car dealers have started recently been sales prices by $2,000 per unit.
Nguyen Ha Thoan, an employee at the GP Auto Showroom, attributed increasing prices to the lack of imported cars, importers being afraid of a new circular introduced by the Ministry of Industry and Trade.
Under Circular 20, traders have to prove that they are authorised sales agents by providing letters of authority or authorised sales agent certificates.
Domestic car dealers have been worried that the new circular would negatively affect the imported car market, resulting in a rush for cars in order to avoid increased prices due to the new circular which would be effective from June 26.
Around 50 car importers discussed measures to deal with the new regulation on Tuesday, deciding to petition the ministries of industry and trade and justice, asking for a revision of the new regulations.
Bui Thanh Hai, from the Dong Hai automobile company, said that the new regulations would hinder the import of cars and that, within a short period, the imported car market would be in the hands of joint-venture companies.
Hai added that, after June 26, imported cars would become scare, significantly pushing up prices. Car dealers/importers would have to change business or face going bankrupt.
Nguyen Tuan, director of the Thien Phuc automobile company, said that, although most car importers supported the Government's efforts aimed at reducing trade deficits, the new regulations should be reviewed.
Tuan added that the new circular would hinder the import of new cars and that car importers would eventually find loopholes by importing used cars, resulting in used cars flooding the local market. This would work against the Government's aims to limit the import of used cars.
Deputy Minister of Industry and Trade, Nguyen Thanh Bien, affirmed that the new Government regulations were aimed at controlling import and export in order to protect consumers without violating WTO commitments.
Bien called on first car importers to adhere to the new regulations.