Price of cars, motorcycles imported from Europe can only reduced in the next 7 to 10 years

It will take 7 years for Vietnam to lift its import tax for motorcycles with engine capacity exceeding 150cc imported from Europe and another 3 years (10 years in total) for the country to do the same with cars.

Those were the agreements between Vietnam and the EU after the Vietnam – EU Free Trade Agreement (EVFTA) was established, in which 99% of import taxes will be erased under a determined route.

Mr. Franz Jessen, Ambassador and Head of the EU Delegation in Vietnam stated “As soon as EVFTA’s effect kicks in, Vietnam will remove 65% of its import tax for EU items, the remaining will be removed in the next 10 years. On our side, we will erase 71% of import tax for Vietnam goods and the remaining will also be erased in the next 7 years”.

Also according to Mr. Jessen, the majority of machines and devices imported from EU will also have their import tax removed right after EVTFA’s effect kicks in while the minor will have to wait for another 5 years. It will take 7 years for Vietnam to lift its import tax for motorcycles with engine capacity exceeding 150cc imported from Europe and another 3 years (10 years in total) for the country to do the same with cars. Cars with 3.000cc petrol engine or higher or 2.500cc diesel engine or higher will have their import tax lifted after 9 years.

In another development, the auto agreement in Vietnam – South Korea FTA recently signed in May only stated that import tax for 10-to-20-ton trucks or cars with 3.000cc petrol engine or higher, which see very low demand. South Korea stated that the biggest obstacle to develop an open auto market in Vietnam is taxes, fees and especially the popular psychology that car is a luxury item.

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