Increasing taxes on pick-up trucks: The need to hear public opinion

Reasons to Maintain the Current Tax Rate

During discussions on the draft amendments to tax laws, particularly the special consumption tax, the proposal to increase taxes on pick-up trucks faced strong opposition from many National Assembly deputies. According to the draft, double-cabin pick-up trucks and VAN trucks with two or more rows of seats would be subject to a special consumption tax equal to 60% of the rate applied to passenger vehicles. This tax rate could significantly raise pick-up truck prices, creating difficulties for citizens, especially those in rural areas.

Speaking at the National Assembly, delegate Phan Duc Hieu (Thai Binh province delegation) pointed out that pick-up trucks are primarily used for production and transporting goods in challenging and rural areas where infrastructure is not suitable for other vehicles. An increase in taxes would directly impact workers and small businesses. Mr. Hieu argued that pick-up trucks are not luxury vehicles but essential tools for production and business operations. Notably, pick-up trucks have a long lifespan, making it difficult for buyers to switch to other vehicle types if taxes increase.

This means that low-income individuals or those in underdeveloped areas would face greater barriers to owning suitable transportation. Mr. Hieu emphasized that instead of raising taxes, mechanisms should be introduced to encourage the use of pick-up trucks in rural development and production, alleviating difficulties for poor workers.

He is not alone in this view. Other delegates, such as Nguyen Thanh Phuong (Can Tho city delegation), also expressed agreement. Mr. Phuong noted that increasing taxes would impact rural residents, making it difficult for them to own vehicles for work and complicating the transportation of goods and materials.

Impact on the Automotive Industry

In addition to directly affecting the public, the proposed increase in taxes on pick-up trucks would also have a significant impact on the domestic automotive industry. According to experts, pick-up trucks account for only about 5% of the total car market in Vietnam. However, they are very popular in mountainous areas and rural provinces, where the demand for transporting goods is high. Pick-up trucks are highly valued for their convenience, especially in hard-to-reach areas where other vehicles cannot operate effectively.

One National Assembly delegate shared that the tax increase on pick-up trucks would directly affect a major car manufacturer in Vietnam, which mainly produces and supplies pick-up trucks. If the proposed tax rate is applied, it could lead to factory closures, impacting thousands of workers and indirectly affecting the economy. Many experts are also concerned that this tax policy could reduce the competitiveness of the Vietnamese automotive industry compared to other ASEAN countries, where taxes on pick-up trucks are much lower.

Imposing high taxes on pick-up trucks not only affects consumers but also creates challenges for domestic businesses that are striving to produce and develop environmentally friendly vehicle lines. In the context of green transition and sustainable development, car manufacturers need support to develop fuel-efficient and environmentally protective vehicle models.

It is Necessary to Listen to Public Opinion

In light of concerns about the impact of the tax increase on pick-up trucks, many National Assembly delegates believe that the government and relevant authorities need to listen to the opinions of the public and businesses. In a time when the economy is still facing many challenges, sudden changes in tax policies could lead to undesirable consequences, especially for low-income individuals and small businesses.

Delegate Duong Minh Anh (Hanoi City delegation) shared that pick-up trucks are not vehicles for the wealthy, but primarily serve the practical needs of the public and businesses. In countries like Thailand, Laos, and Indonesia, pick-up trucks are very popular and widely used by both public servants and citizens due to their convenience and ability to transport goods and people in difficult traffic conditions. The tax rate on these vehicles in these countries is very low, which puts Vietnam at risk of falling behind in the development of the automotive industry.

Increasing taxes on pick-up trucks could create a shock to the economy, especially at a time when many businesses are undergoing transformations to adapt to trends in reducing emissions and protecting the environment. If tax policies are not adjusted appropriately, it could diminish the competitiveness of the domestic automotive industry, affect the livelihoods of thousands of workers, and have a negative impact on the economy as a whole.

Therefore, before implementing new policies, the government needs to conduct thorough research and surveys, listening to the opinions and contributions of citizens, businesses, and industry experts. Only with a reasonable and fair tax policy can the Vietnamese automotive industry develop sustainably and meet the needs of both the domestic and international markets.

Phan Chinh