VAN tax: all relevant ministries and branches are to blame

The Government inspectors have submitted a report to the Prime Minister about the taxation on imported VANs. Prior to that, relevant ministries had not come to an agreement about the tax rate to be applied to the vehicles.
Amphibious vehicle raises arguments among ministries

In 2009, customs agencies, after examining the consignments of imported VANs with Kia Morning and Daewoo Matiz, found out that these were the vehicles to carry passengers, not the vehicles to carry goods. They came to a conclusion that the importers tried to make trade fraud, by declaring that these were the vehicles to carry goods to evade import tax. They also decided to impose the high tax rates applied to passenger vehicles on the imports.

The importers believe that the conclusion made by the customs agencies was unreasonable and they have made complaints to relevant ministries and branches.

According to the Government’s inspectors, the imported VANs belong to an amphibious vehicle which can be used to carry both passengers and cargos. The noteworthy thing is that referring to the standards stipulated by TCVN 7271:2003, which has been valid since January 8, 2010; the Vietnam Register has decided that these are the vehicles to carry goods. The agency has granted the certificate of technical quality, safety and environmental protection to the imported vehicles.

The problem is that relevant ministries and branches could not reach any agreement about which kind of vehicles the imports should be classified to.

Who to take responsibility?

The government’s inspectors believe that the Ministries of Science and Technology, Transport, Public Security, the Vietnam Register and General Department of Customs are to blame on this issue.

The inspectors said that the standards in TCVN: 7271:2003, were spare and too simple, which did not fit the standards for classifying imports and exports stipulated in the Government’s Decree No 06, dated January 22, 2003. As a result, enterprises have been corrupt in the use of the loophole to evade tax.

Besides this, the Ministry of Finance and General Department of Customs did not do well in the classification of goods when enterprises began importing these kinds of vehicles some years ago. Therefore, there has been no consistency in classifying import goods and disagreement in taxation.

The government’s inspectors have also found that the registration to circulate this kind of vehicle has not been carried out in accordance with necessary strict procedures. There has been no specific regulation which creates best conditions for the examining vehicles. Also, relevant ministries and branches did not have timely cooperation to settle the problem.

What to do?

There are two solutions to deal with the problem, according to the government’s inspectors.

Regarding the VANs with Kia Morning and Daewoo Matiz imported to Vietnam after November 8, 2011 (after that day, TCVN 7271:2003 has been adjusted to make it suitable to the regulations stipulated in Decree 06), the imports will be taxed as vehicles to carry passengers.

The inspectors think that in order to prevent trade fraud, it is necessary to prohibit importing two-seat VANs with Kia Morning brand with the tonnage of 300 kilos.

As for the VANs with Kia Morning and Daewoo Matiz which were imported to Vietnam prior to November 8, 2010, and users having registered for circulation, the vehicles’ users need to convert the VANs into passenger vehicles. The Ministry of Public Security will have to instruct to change the number plates of the vehicles for easier control.- SGTT