“Proposed Special Consumption Tax Hike Could See Pickup Truck Prices Soar in Vietnam”

The Ministry of Finance has proposed a special consumption tax on pickup trucks, set at 60% of the special consumption tax rate for automobiles with less than nine seats, powered by internal combustion engines.

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In the latest draft amendment to the Law on Special Consumption Tax presented to the Government, the Ministry of Finance has proposed to double the special consumption tax on pickup trucks compared to the current rate.

According to the National Technical Regulation on Road Signs QCVN 41:2019/BGTVT, pickup trucks with double cabs are subject to the same road sign systems as passenger cars. Additionally, this type of vehicle is not restricted in terms of time and lanes permitted to circulate in urban areas.

To enhance state management of pickup trucks with double cabins and regulate the use of vehicles in large cities, the Ministry of Finance proposed a special consumption tax of 60% on pickup trucks, equivalent to the special consumption tax rate for passenger cars with less than nine seats that use internal combustion engines.

If this proposal is approved, it will increase state revenue compared to the current situation. However, the price of pickup trucks will also increase, affecting consumer demand and the business operations of companies producing and importing this type of vehicle.

Currently, the special consumption tax on pickup trucks sold in the Vietnamese market is based on the engine displacement. Pickup trucks with engine displacement of 2.5L or lower are subject to a special consumption tax rate of 15%. The corresponding rate for vehicles with engine displacement between 2.5L and 3.0L is 20%. For those with engine displacement above 3.0L, the special consumption tax rate is 25%.

With the Ministry of Finance’s proposal, pickup trucks with engine displacement below 2.5L will be subject to a special consumption tax equivalent to 60% of the rate for passenger cars with less than nine seats and the same displacement, i.e., 30%. The corresponding rate for vehicles with engine displacement between 2.5L and 3.0L will be 36%, and for those with engine displacement above 3.0L, it will be 54%. In other words, the price of pickup trucks will increase significantly, by up to hundreds of millions of VND.

For example, for a pickup truck with an engine displacement of less than 2.5L and an import price of approximately 450 million VND, the special consumption tax of 15% currently applied would amount to 70 million VND. If the special consumption tax for this vehicle increases to 30%, the price will increase by 140 million VND.

The increase in the special consumption tax rate will cause companies to adjust the selling price of pickup trucks. Consumers will be the first to be affected, as they will have to purchase vehicles at higher prices. Consequently, the sales of pickup trucks are expected to decrease.

There are currently five pickup truck models sold in Vietnam, including the Ford Ranger, Mitsubishi Triton, Toyota Hilux, Isuzu D-Max, and Nissan Navara. Meanwhile, the Mazda BT-50 model has been discontinued in the Vietnamese market. Most of these models are equipped with engines with a displacement of 2.0L or higher.

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