25 Jun, 2020 Kartenex
Sedans with 2,500 c.c. engines or less will have tariffs cut from the current 70.9 percent to 56.7 percent by 2022, according to a Finance Ministry release.
For sedans with engines more powerful than 2,500 c.c. to less than 3,000 c.c, the tariffs will be reduced from 67.2 percent to 53.8 percent.
Sedans with engines of more than 3,000 c.c. will have tariffs reduced from 70.2 percent to 54.6 percent.
This means that European car prices could drop in the next two years. A 2,500 c.c. engine sedan which costs VND2 billion ($85,800) will see imports tariffs drop by VND268 million ($11,500) by 2022.
Imported European cars currently bear duties and other charges including import tariffs of around 70 percent, special consumption tax from 35-150 percent, value-added tax of 10 percent and registration fees of 10-20 percent.
Vietnam in May ratified the EU-Vietnam Free Trade Agreement (EVFTA), a landmark trade pact that will cut or eliminate 99 percent of tariffs on goods traded between the two sides. The trade pact is set to take effect on August 1.