The ministry cannot continue giving preferential tax policies to the auto industry when customers are still asked to wait for a whole year to receive the cars they buy, he said.

He also said high car prices in Vietnam were often blamed on tax policies but argued that “prices are determined by supply and demand while taxes play only a small role.”

The government put in place the incentives, including cuts in taxes and registration fees, to boost buying and help local car makers cope with the economic downturn. But starting next year, consumers will no longer enjoy the 50 percent cut in value-added tax in place since February. Vehicle registration fees of 10-12 percent were cut in half in May and are also slated to return normal again next year.

Local car makers said the car market would face a sharp decline next year without the incentives. They asked the government to extend tax cuts and give the auto industry more time to fully recover.

According to the Vietnam Automobile Manufacturers’ Association, auto sales in Vietnam from January to September dropped 12 percent from the same period last year.

Reported by Ngan Anh