Domestic Car Manufacturers May Benefit from Reduced Registration Fees for a Three-Month Period

The government is proposing a 50% reduction in registration fees for domestically produced and assembled cars for a period of three months. This information is outlined in the Office of the Government’s Notification 384, dated August 15, regarding the draft Decree on registration fee rates for domestically produced cars.

According to this notification, the Prime Minister held a meeting with the Deputy Prime Ministers and relevant ministry leaders to discuss registration fees for domestically produced and assembled cars. Following the meeting, the Government agreed to halve the registration fees for these vehicles, but the period of application will be shortened to three months, down from the initially proposed six months.

The Ministry of Finance has been tasked by the Government to finalize the draft decree and submit it to the Prime Minister for issuance before August 18. This task was initially assigned to the Ministry of Finance back in May 2024. However, the financial management agency requested that the Government reconsider implementing this policy. This is due to the fact that Vietnam has received multiple inquiries regarding the perceived discrimination in the policy between domestically produced and imported vehicles.

In the documents sent to the Ministry of Justice for appraisal on July 11, the Ministry of Finance continued to refine the policy of reducing registration fees by 50% for domestically produced and assembled cars, as per the requirements of the competent authority. However, the Ministry of Finance also requested that the Government assign the Ministry of Industry and Trade to review and propose solutions in case Vietnam is subject to trade litigation. The implementation of this policy is estimated to result in a reduction of state budget revenue by approximately VND 5,200 billion.

Information about the government’s support for domestically produced and assembled cars by reducing registration fees by 50% has been circulating since April 2024. Since then, domestic consumers have been eagerly awaiting the enforcement of this policy. Many individuals have postponed their car purchases in anticipation of the reduced registration fees, impacting the overall market sales. Meanwhile, car manufacturers and dealers have continuously launched attractive promotional programs to stimulate demand.

This is the fourth time that registration fees for domestically produced and assembled cars have been reduced. The first reduction was implemented in the last six months of 2020, followed by another six-month period starting from December 1, 2021. The third reduction took effect from July 1 to December 31, 2023. These previous fee reductions have had a positive impact on Vietnam’s automobile market.