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Auto registration fee slashed to counter weak sales   2009-05-03 - TN

VietNamNet Bridge - The government Friday halved the automobile registration fee to 5-6 percent of the vehicle price in an effort to boost sales and help automakers cope with the economic slump.

The lower rate will be in effect until the end of this year.

The government has halved the value-added tax on a number of goods including fiber, cloth, garments, leather and footwear, paper and paper products, cement, tiles, and 125cc motorcycles or bigger, effective from Friday. The previous VAT rates on these items ranged from five to ten percent.

The government also knocked 30 percent off the corporate tax for the fourth quarter of 2008 for certain textile, garment and footwear firms.

For a vehicle with fewer than ten seats, registration will cost six percent of the price in Hanoi and five percent elsewhere.

Auto dealers in Ho Chi Minh City say they recorded more visits Friday but made few sales, possibly because it was still a holiday.

They pointed out that the cheaper registration in many cases would not offset the higher prices of many vehicles since March and early April.

The Toyota Innova G minivan went up by US$3,800 in April, so buyers will pay just $1,640 less for registration.

Similarly, to register a Chevrolet Captiva SUV, which rose by more than $5,150 last month, it will cost around $1,930.

According to the Vietnam Automobile Manufacturers’ Association (VAMA), first quarter sales plunged 36 percent from the same period last year to 21,839 units as the economic slowdown hit demand.

Half of these were sold in March as buyers rushed to beat a steep hike in the luxury tax from April 1, the association said.

The General Statistics Office says it recorded an increase in car sales, which more than tripled to 4,300 units in March from 1,300 in January and should reach 4,500 in April.

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