Vietnam to hike taxes on imported cars by 10 percent

http://www.forbes.com/markets/feeds/afx/2008/03/13/afx4767472.html

HANOI (Thomson Financial) – Vietnam will raise taxes on imported cars by 10 percent in a move state media Thursday said was to curb rampant traffic congestion in the communist country.

Import duty on new passenger cars will increase to 70 percent from 60 percent while used autos would be subject to an average 10 percent rise, according to a finance ministry decision.

‘The decision was signed Tuesday and will take effect 15 days after being published in the official gazette,’ finance ministry official Ha Huy Tuan told Agence France-Presse but did not give a date.

Vietnam, a country of 86 million people, is facing challenges from a rapid rise in car ownership which has accompanied the booming economy, with traffic choking the streets of major cities such as Hanoi and Ho Chi Minh City.

Vietnam had cut taxes on imported cars three times since January 2007, when the country joined the World Trade Organization, from 90 percent to the current level of 60 percent.

With these decreased duty rates, the country imported 30,330 vehicles last year, nearly twice as many as in 2006, with a total value of 579 million dollars, according to official statistics.

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