Vietnam has decided to put an end on a policy that grants tax exemption to cars and motorbikes taken to their home country by overseas Vietnamese, or Viet Kieu, as many have been found abusing the privilege.
Starting September 1, those vehicles taken to Vietnam by overseas Vietnamese are no longer eligible for the exemption, which cover import tariff and value-added and special consumption taxes, according to the new Law on export, import duty.
According to the previous regulation, the Viet Kieu were able to bring in Vietnam their used cars and motorbikes without having to pay those taxes, as an incentive granted by the Vietnamese government in encouraging overseas citizens to return to the Southeast Asian country
However, an inspection has revealed many people have taken advantage of the privilege to import brand new vehicles without having to pay taxes.
Statistics by the Ministry of Finance showed at only ten percent of the imported vehicles were really owned by those overseas citizens who decided to resettle in Vietnam, in accordance with the regulation.
The rest of the vehicles, mostly new and expensive cars, would later be sold or transferred to other owners.
The new tax law has removed cars and motorbikes from the list of imported products eligible for tax exemption.
The new rule is also applicable to foreigners and overseas Vietnamese who live and work for organizations in Vietnam for 12 months and over, according to The Saigon Times Online.