HCMC – The Ministry of Industry and Trade has thrown its weight behind a proposal for a 50% registration fee cut and an extension of special consumption tax payments for domestically made and assembled cars to boost consumption.

Deputy Minister of Industry and Trade Phan Thi Thang wrote to the Ministry of Finance on April 25 giving feedback on the proposal.

As protracted economic uncertainties, foreign exchange market volatility, inflation and high interest rates have left negative impact on car manufacturers and consumers, it is necessary to reduce registration fees for locally made and assembled automobiles until the end of this year, said the Ministry of Industry and Trade.

A Vietnam Automobile Manufacturers Association report showed that car sales in the first three months of the year dropped sharply. Large auto manufacturers sold 77,090 cars, down 30% from the year-ago period.

Earlier, industry associations and localities proposed that the Government allow for a special consumption tax payment extension and a 50% registration fee reduction for domestically made and assembled cars to stimulate demand.

However, the Ministry of Finance did not endorse the proposal, expressing concern that the car registration fee cut would violate the country’s international commitments and affect budget revenue.

For the special consumption tax, the two ministries agreed to reschedule the tax payment.