Tax payment deferral proposed to support carmakers in Vietnam

By Thanh Thanh, Minh Hue
Mon, March 10, 2025 | 3:43 pm GMT+7

Vietnam’s Ministry of Finance has proposed extending the deadline for paying excise tax on domestically manufactured or assembled automobiles in 2025, which amounts to approximately VND14.1 trillion ($552.35 million).

 A car produced by Honda Vietnam. Photo courtesy of Honda Vietnam.

A car produced by Honda Vietnam. Photo courtesy of Honda Vietnam.

In a draft decree recently submitted to the government, the ministry (MoF) stated that both the automobile market and the broader Vietnamese economy are forecast to continue facing global challenges this year.

Relying solely on resources from individual enterprises and demand-stimulation measures will not be enough to maintain production and sales volumes or to generate momentum for balanced and sustainable market growth.

Therefore, continued support for domestic automobile manufacturers and assemblers is essential to facilitate production recovery and business development, it said.

Moreover, once the deferral period expires, automobile manufacturers and assemblers will be required to pay the full amount of excise tax to the state budget. Therefore, the MoF proposes to extend the tax payment deadline further to help ease the financial pressures on domestic car manufacturers and assemblers.

To ensure the extension of the excise tax payment deadline in 2025 does not lead to adjustments in the state budget revenue estimate and is line with the current economic context, the ministry suggests deferring the payment of excise tax incurred in February, March, April, May, and June 2025 for domestically produced or assembled automobiles.

The extension period would run from the original excise tax payment deadline, as outlined in tax management regulations, until November 20, 2025, it said.

The ministry explained that proposing a unified deadline of November 20, 2025 would help avoid a large accumulation of payments for businesses toward the end of the year and mitigate the risk of impacting the fulfillment of the state budget revenue estimate, especially in the case businesses face financial difficulties.

Additionally, the extension will apply to companies that file supplementary tax returns for the deferred period, as well as to those with branches or subsidiaries engaged in automobile production or assembly that file separate excise tax declarations with their respective tax authorities.

The MoF emphasized that this extension is not a tax concession and does not violate subsidy regulations, meaning it is unlikely to raise concerns among automobile importers.

Earlier, in 2024, due to global economic instability and challenges faced by businesses, especially those in the automobile manufacturing and assembly sector, the government issued Decree 65/2024/ND-CP on extending the excise tax payment deadline for domestic automobile producers and assemblers.

As of February 17, 2025, 18 businesses had requested excise tax payment deferrals, totaling over VND13.17 trillion ($515.9 million). These companies have now fully met their tax obligations, paying the deferred amounts into the state budget.

Thanks to government support, including preferential policies such as a 50% reduction in registration fees and the deferral of excise tax payments, along with efforts from car manufacturers and dealerships, member companies of the Vietnam Automobile Manufacturers Association (VAMA) achieved total sales of 308,544 vehicles (excluding sales from Thaco Group, VinFast and others) during the first 11 months of 2024, a 17% year-on-year increase.

According to VAMA data, in January 2025, VAMA members sold a total of 18,893 vehicles, a decrease of 12,705 units, or approximately 40% compared to December 2024. Sales of passenger vehicles fell by 42%, while other segments such as commercial and special-purpose vehicles experienced a 30-40% decline.

Experts believed that extending the excise tax payment deadline further will provide essential support to domestic automobile manufacturers and assemblers, helping them focus their capital on production and business, ultimately boosting economic development.

Commenting on the draft decree, the Vietnam Chamber of Commerce and Industry (VCCI) expressed support for the Ministry of Finance’s proposed policy.

It noted that the domestic automobile manufacturing and assembly industry has been a driving force of the development of supporting industries, created jobs for hundreds of thousands of workers, and made substantial contributions to the state budget.

In the current economic climate, supporting policies are critical, as they will help businesses maintain cash flow, reduce financial pressures, and provide resources to adapt to economic fluctuations.

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