Auto makers ask Gov't to delay tax hike

HCM City (VNA) - Auto manufacturers have asked the Government to delay a
proposed hike in special consumption and value-aded taxes and, in fact, to roll
them back to pre-April 2008 levels.

At a recent meeting with officials from the Ministry of Industry and Trade,
manufacturers also called for delaying a hike in registration fees in Hanoi ,
citing severe difficulties due to the global recession.

The special consumption tax is set to go up from 30-50 percent to 45-60 percent and
value-added tax from 5 to 10 percent.

The fee to register automobiles in the capital is set to be raised from 10 to 12
percent.

The manufacturers also sought a dialogue between the Government and the Vietnam
Automobile Manufacturers Association (VAMA) to develop a comprehensive long-term
strategy for the auto industry.

VAMA said the industry is being affected by a plunge in demand due to the global
economic recession and changes in tax policies last year.

In this context, increasing taxes and registration fee would severely worsen the
situation, it warned.

Average sales in the last quarter of 2008 was down by nearly half from earlier in
the year as a result of a hike in the registration fee from 5 to 10 percent, VAMA
said.

The industry is considering shedding 2,000-3,000 jobs, or 20-30 percent of its
total workforce, the association said.-Enditem