Automobile manufacturers in Vietnam have protested a Finance Ministry plan to cut taxes on imported trucks next year, saying such a move would push them to the verge of bankruptcy.
The ministry has recently accounted a plan to lower import duties on trucks under 20 tons by up to 60 percent starting January 2011, according to the Vietnam Economic Times.
The tax rate on trucks of five to 10 tons, for instance, will be adjusted to 25 percent, compared to the current 54-55 percent.
Trucks are a means of production for businesses and current tax rates are high, leading to high business outlays, the ministry said.
Manufactures opposed the plan, saying it's hasty to cut the duties too low next year as Vietnam still has seven years to fulfill its WTO tariff commitment.
Tran Ba Duong, general director of Thaco Group, said the company has invested a large amount of money for production. Tariff cuts will encourage imports, and it's just like "forcing businesses to go bankrupt," he said.
Similarly, Vinaxuki General Director Bui Ngoc Huyen said his company achieved a local content ratio of 50 percent for trucks after six years of production.
"Now that there was a plan to sharply cut import duties, we may have to close our plants and give up the dream to make Vietnamese automobiles," Huyen said.
The Ministry of Industry and Trade also believed the tax cut plan will hurt the local auto industry. News website VnExpress on Friday cited the ministry as saying the plan should be delayed at least until the end of next year.
Most of truck manufacturers in Vietnam entered the business over the past five years and as new companies, they have invested a lot in production facilities, the Industry and Trade Ministry said.
Current tax rates should be maintained to help them recoup their expenses, the ministry said.
According to the ministry, local companies manufactured 29,900 trucks in the first nine months this year, out of 77,400 units of all kinds of automobile.