Brian Jeffrey
The initiative to cut vehicle registration tax by 50% has been implemented three times in Vietnam since 2020. These tax reductions have incentivized car purchases by offering significant savings to buyers, ultimately aiding automobile manufacturers in driving up sales.
Consequently, the Ministry of Finance (MOF) made a fourth proposal for a tax reduction from August 1, 2024, to January 31, 2025. However, the expected approval did not materialize by August 1, leaving many hopeful buyers disappointed after waiting months for favorable prices.
One such buyer, Quoc Viet from HCM City, postponed his plan to purchase a KIA Sorento in May 2024 in anticipation of a possible 50% tax cut, which could have saved him VND60-70 million. Regrettably, with the proposed tax cut still pending, Viet felt he had made the wrong choice.
He eventually made a rushed decision to buy the car just before the inauspicious seventh lunar month began, against the advice that this period is traditionally avoided for significant transactions due to superstitions about misfortune.
Similarly, Nguyen Thi Ha Thanh from HCM City missed out on a VND40 million offer when she decided to wait for the tax cut before buying a Hyundai Elantra, only to find out that the previous preferences were no longer valid when the tax reduction did not materialize.
Other buyers like Bui Bao Ngoc from Vung Tau City also found themselves trapped in the waiting game, as he delayed his car registration in hopes of benefiting from the proposed tax cut, only to realize that his wait was futile.
The uncertainty surrounding the tax policy has also left car dealers disappointed. Dinh Nam, a salesman at a Mitsubishi showroom in HCM City, rallied his clients to expedite their purchases before the looming ghost month on August 4, following the news of the pending tax cut.
Although the tax cut proposal remained unresolved by August 1, analysts suggest that buyers who are not swayed by superstitions can still take advantage of dealer incentives in August, potentially even government benefits if the tax cut is approved soon.
