Imported cars are expected to become more expensive by around 5% if the finance ministry's draft plan to adjust the calculation of special consumption tax on imported automobiles is approved.

Under the current regulations, the special consumption tax on imported automobiles is calculated on their cost, insurance, and freight value plus current import tariff.

However, the draft plan suggests that the special consumption tax on imported cars with less than 24 seats will be calculated on the basis of the current special consumption tax plus the domestic sale fee of importers. The domestic sale fee should be calculated on the basis of fees paid for services such as packing, managing, advertising, displaying, transporting, and the warranty plus interest of tax payers.

The domestic sale fee will be levied on importers when cars are sold.

The draft plan will be submitted to the Prime Minister for approval in June; if approved, it will take effect from January 1, 2016.

From April 1, 2009, till date, 45%, 50% and 60% as taxes have been levied on cars that have nine seats and lower, with a cylinder capacity of below two litres, between two and three litres, and more than three litres, respectively.

(Source: VNA)