The Ministry of Industry and Trade and Transport support tax and fee incentives for electric cars, while the Ministry of Finance said that if this policy is applied, the law must be changed.
In the middle of last month, Vingroup proposed that the Government and ministries and branches allow piloting tax and fee incentives for electric cars.
Before this proposal, Deputy Minister of Industry and Trade Do Thang Hai said that “it is possible to consider” pilot application of preferential policies that do not collect special consumption tax and registration fee for 5 years. The reason, according to leaders of the Ministry of Industry and Trade, this policy will encourage production and support consumers to use environmentally friendly electric cars.
On the other hand, the Deputy Minister of Industry and Trade argued that preferential policies for electric cars will contribute to reducing emissions released into the environment by means of transport, in line with the national industrial development orientation to 2030. vision to 2045.
The Ministry of Transport also agreed with the proposal of preferential policies for electric vehicles. In a document sent to the Ministry of Finance, Deputy Minister of Transport Le Dinh Tho assessed that the development of motorized vehicles using electricity is one of the measures to help reduce greenhouse gas emissions in accordance with international commitments on environmental protection. environment.
However, the Ministry of Transport noted the financial industry, referring to the experience of tax and fee incentives that some countries are applying to advise the Government to come up with preferential policies close to the reality of the development of the automobile industry. in the country, suitable for the situation in Vietnam.
Currently, the excise tax rate applied from July 2016 for electric cars of 9 seats or less is 15% (down 10% compared to the previous); The tax rate for 10-16-seat cars is 10% and for 16-34 seats is 5%.
Regarding the registration fee, cars with 9 seats or less pay the first registration fee of 10-12% depending on the locality. The rate for the second time onwards is 2%. Preferential registration fee incentives are only applied to buses using clean energy, encouraging the development of environmentally friendly public passenger transport.
Giving views on preferential policies for electric cars, the Ministry of Finance said that it will have to correct and supplement a series of regulations, even have to amend the law if you want to apply the preferential policy that Vingroup proposes.
Deputy Minister Vu Thi Mai in a document sent to ministries and branches said that the adjustment of tax policy falls under the competence of the National Assembly. Therefore, if piloting the excise tax exemption policy for electric cars for 5 years, it will have to submit to the National Assembly to amend the Law on Special Consumption Tax. She said that the agency is assessing the overall implementation of the excise tax policy on cars over the past time, studying and submitting to the competent authorities to amend this tax law.
Meanwhile, the registration fee rate is under the authority of the Government, so with the proposal that Vingroup makes, it will have to amend Decree 140 on registration fees.
Along with Vingroup’s proposal, the Ministry is synthesizing opinions of businesses related to adjusting the registration fee rate in the context of the impact of Covid-19. It is expected that in October, this agency will submit to the Government for consideration and amendment of the registration fee for cars. The Ministry of Finance also left open the possibility that it will submit to a shortened order and procedures if it is necessary to issue this policy sooner, in order to remove difficulties for businesses before the pandemic.
Electric cars are a new development trend of the world auto industry and are expected to grow strongly. Many countries around the world have developed environmentally friendly cars. They also offer different policies to support finance, tax… to prioritize the development and use of electric vehicles.
For example, Korea exempts excise and vehicle taxes for battery electric vehicles and electric cars using hydrogen fuel. Electric vehicle buyers in Korea will receive a maximum reduction of $2,000 in personal consumption tax (one-time payment); 1,400 USD reduction in car purchase tax. The government also offers a price support of 13,000 USD for all electric vehicles, but this subsidy has been gradually reduced from 2014 to now.
China exempts consumption tax and reduces registration fees by 50% for battery electric cars. And Thailand, Indonesia … offer a series of tax and fee incentives for 5 years to encourage people in these countries to own and use electric vehicles.
With Vietnam, people’s demand for using personal vehicles is very high. The government has many solutions to switch from using gasoline-powered cars to electric vehicles to reduce emissions from personal vehicles and improve air quality. As a new field, the competitive pressure in the electric vehicle market is not as strong as that of fossil fuel vehicles with less than 9 seats. This opens up the possibility of developing Vietnam’s auto industry in the direction of electric vehicle production.
However, producing electric cars is not necessarily easy. Experts commented that this is a new type of car, so it needs to be carefully considered by the authorities about the policy. To develop electric vehicles, tax incentives and fees are not enough. One of the difficult and expensive points for electric cars to develop is the fuel filling station system. In this regard, the Ministry of Finance identifies as the biggest obstacle for Vietnam.
“The infrastructure for the charging station is still lacking, and the main source of power is still from fuels with high CO2 emissions, accounting for nearly half of the total mobilized electricity. While the electricity is generated from renewable energy, Electricity generation accounts for a small proportion, about 4.3% and this is an unstable source of electricity”, commented the Ministry of Finance.
On the other hand, the production cost of electric cars is still high. Only when the number of motor vehicles decreases, along with superior technology, and the price of electric cars is cheaper, then there is an opportunity for production and consumption of this type of vehicle.