The Vietnam Tax Consulting Association (VTCA) has recently submitted a document to the National Assembly’s Economic and Financial Committee, providing feedback on the draft Law on Special Consumption Tax (amended). This draft law has already been discussed by the National Assembly during their 8th session back in November 2024.
There are current proposals to increase the special consumption tax on pickup trucks |
The draft law proposes amendments to the description of automobiles and specifies tax rates for pickup trucks (also known as pickup trucks in Vietnam) that fall under the category of passenger cars and four-wheeled vehicles with a capacity of up to nine seats. Accordingly, a suitable tax rate of 60% of the tax rate applied to passenger cars will be applied to double-cabin pickup trucks and VAN trucks with two or more rows of seats.
Commenting on this proposal, VTCA argued that the distinctive feature of double-cabin pickup trucks lies in their combination of passenger and cargo transportation capabilities. They are designed with a high chassis, excellent load-bearing capacity, multi-purpose functionality, and the ability to navigate through diverse terrains. These vehicles can transport goods and equipment to areas with challenging and inaccessible landscapes.
According to statistics from the Vietnam Automobile Manufacturers’ Association (VAMA), the breakdown of double-cabin pickup truck users is as follows: 70% in provinces and cities outside Hanoi and Ho Chi Minh City, and 30% in Hanoi and Ho Chi Minh City.
The statistics also revealed that 36% of these vehicles are used by agencies and businesses, while 64% are utilized by individuals, mainly for transportation and small- to medium-scale commercial purposes.
VTCA shared that the current special consumption tax rates for double-cabin pickup trucks are 15%, 20%, and 25%, depending on engine capacity. As per the new proposal, these rates would increase to 24%, 36%, and 54%, respectively, more than doubling the previous rates.
Considering the consumer profile reflected in the aforementioned statistics and drawing from the experiences of neighboring countries in the region, the Vietnam Tax Consulting Association suggested maintaining the special consumption tax rates for double-cabin pickup trucks at the levels stipulated in the current Law.
The Vietnam Chamber of Commerce and Industry (VCCI) expressed their opinion that the proposed increase in tax rates for double-cabin pickup trucks in the draft law is not truly aligned with the overall context of the automobile market at present.
“Pickup trucks with double cabins are primarily used for cargo transportation, small- and medium-scale business operations, and official purposes by government agencies, especially in areas outside urban centers,” VCCI clarified.
VCCI emphasized that quantitative analysis indicates that raising the special consumption tax rate for this type of vehicle could lead to several adverse consequences. These include a decrease in state budget revenue (estimated at VND 7.7 trillion in the 2024-2030 period), a significant drop in vehicle sales (a projected 36% decline), and challenges for businesses that have already invested in expanding their production.
Additionally, the increased tax rate would result in higher costs for new vehicle investments, limiting the accessibility of enterprises and individuals with genuine needs. The policy could also undermine the effectiveness of the government’s goals regarding tax policy balance across different vehicle segments, environmental protection, and urban traffic management.
Therefore, businesses proposed maintaining the existing special consumption tax rates for double-cabin pickup trucks to ensure market stability, provide support to enterprises, and sustain state budget revenue.
Minh Chien
– 09:56 09/03/2025
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