Quoc Hung
Jesus Metelo Arias, general director of Ford Vietnam, told the Daily that industry players find it hard to set up their own development paths due to unclear and fast-changing policies of the country regarding the auto industry.
Vietnam is a sizeable auto market, but how it will develop depends on the Government’s planning policies and how such policies are implemented, said Arias, who also serves as chairman of the Vietnam Automobile Manufacturers Association (VAMA).
He noted that the policy and orientation for the auto industry on the part of the Vietnamese Government have not been well-established.
VAMA has had several seminars and dialogues with the Government to look for solutions to enhance the local auto industry’s competitiveness as the deadline of 2018 is drawing near when auto import tariffs will be slashed to 0% under Vietnam’s commitments to the ASEAN Free Trade Area (AFTA), he said.
There have been two scenarios discussed, one on maintaining the high rates until 2018 and the other on gradually bringing down the tariffs to zero upon the deadline. However, the Government has not given its final say on the matter.
Arias commented that the local auto industry has experienced a rocky path of development due to unpredictable tax policy changes, which have given concerns to those local automakers who want to make in-depth investments here.
Vietnam imposes higher taxes on autos than other ASEAN peers, which erodes the competitiveness of local products.
Arias argued that higher taxes did not mean higher revenue for State coffers, citing a study by the Ministry of Industry and Trade to conclude that a lower tax regime would do better.
The Ministry of Industry and Trade in a draft estimates that if the special consumption tax on autos is halved, the auto industry will contribute an additional tax revenue equivalent to some 1% of the nation’s gross domestic product (GDP). “As such, revenue for the State budget will increase if taxes are cut,” he said.
Arias stressed VAMA’s viewpoint that the Government maintain a consistent tax policy towards the auto industry.
“The key point that VAMA wants to recommend to the Government is the predictability and stability,” he said, adding the Government needs to take a long-term vision, not just with AFTA but also other trade agreements like the one with the EU, the future Trans-Pacific Partnership agreement, and other WTO conventions.
The Government should have a long-term, overall viewpoint, creating a concrete roadmap so that automakers can prepare themselves and make their own plans for development to sharpen their competitiveness, he said.
Đăng ký: VietNam News
