HÀ NỘI — The Ministry of Finance has proposed extending preferential special consumption tax rates on battery-powered vehicles with fewer than 24 seats until the end of 2030 as Việt Nam seeks to accelerate its transition away from fossil fuels and support its net-zero commitment.

The ministry said the measure aims to encourage the shift from fossil fuel-powered vehicles towards environmentally friendly transport and support the country’s Net Zero target.

Under current regulations introduced in 2022 special consumption tax rates on battery-powered vehicles range between 1–3 per cent depending on the number of seats, significantly lower than the 10–150 per cent applied to vehicles using internal combustion engines. From March 1, 2027 the tax rates on electric vehicles will be raised to 4–11 per cent.

The ministry said the preferential rates have helped lower vehicle prices, boost consumer demand and encourage the expansion of battery-powered vehicle production.

In a National Assembly draft resolution, the ministry proposed maintaining the current tax rates through December 31, 2030 after which higher rates would apply from 2031.

Specifically, vehicles with up to nine seats, including passenger cars and pick-up trucks designed for passenger transport, would continue to be taxed at 3 per cent until the end of 2030 then 11 per cent from 2031.

Vehicles with 10 to under 16 seats would be subject to a 2 per cent rate until 2030 then 7 per cent thereafter while those with 16 to under 24 seats would be taxed at 1 per cent then 4 per cent from 2031.

For dual-cabin pick-up trucks and VAN trucks with two or more rows of seats and a fixed partition between passenger and cargo areas the tax rate would remain at 2 per cent until 2030 then 7 per cent from 2031.

The ministry said extending the tax incentives would help ensure policy consistency with Việt Nam’s environmental goals support market stability amid volatile global fuel prices and accelerate the shift towards cleaner energy sources. — VNS