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| Automobiles on display at an expo in HCMC. The prices of imported cars from Europe will remain high - PHOTO: LE HOANG |
HCMC - The prices of completely-built-up (CBU) automobiles imported from European countries will not immediately fall when the EU-Vietnam Free Trade Agreement (EVFTA) takes effect as Vietnam has only committed to cutting tariffs on these products after nine to 10 years.
The European Parliament has given their consent to the EVFTA, while Vietnam’s National Assembly will consider and ratify the deal in May, so that the deal may take effect in July this year.
Although many Vietnamese consumers expected the prices of CBU automobiles imported from Europe to drop in July, Vietnam has only committed to cutting tariffs for cars with a gasoline engine capacity of over 3,000 cubic centimeters and diesel engine capacity of over 2,500 cubic centimeters after nine years, and for other vehicles, after 10 years.
At present, imported cars from Europe to Vietnam are subject to a maximum tax rate of 70%. Under the country’s commitments in the EVFTA, the rate must be raised to 78% before being reduced gradually to 0%.
Since 2018, automobile imports from Thailand and Indonesia have been exempt from import duties, according to Vietnam’s commitments under the ASEAN Trade in Goods Agreement, but the selling prices of these cars have not been lowered accordingly.
Therefore, experts are concerned that vehicles imported from Europe will join this trend.
Theo TheSaigonTimes
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