Vietnam may raise automobile import duties to cut worsening traffic congestion fuelled by surging sales of both imported and locally-assembled cars, state media reported Friday.
As traffic is choking up the streets of Hanoi and Ho Chi Minh City, the government is considering raising import taxes on both imported cars and spare parts, the state-run Vietnam News Agency (VNA) reported.
Prime Minister Nguyen Tan Dung has asked government ministries to draw up suitable tax policies aimed at reducing traffic jams, the report said, with proposals ranging as high as a 70-percent import duty rate. Customers who have heard about the possible tax increases are rushing to buy cars in anticipation of higher prices, said the report.
Sales of vehicles assembled in Vietnam rose 156 percent to over 12,000 units in January year-on-year, the Vietnam Automobile Manufacturers' Association said, pointing to a 350 percent increase in the commercial vehicle sector.
The imports of completely built units shot up by an even steeper 421 percent year-on-year, with about 3,000 units worth almost 50 million dollars imported into Vietnam in January, said the Industry and Trade Ministry.
Communist Vietnam, an emerging economy with 8.5 percent growth last year, moved from mainly bicycles to motorcycles in the 1990s and is now witnessing a rapid rise in car ownership, especially in the biggest cities.