Vietnam is considering making significant cuts to car taxes to boost domestic production, especially when import tariffs are scrapped on cars from Southeast Asia in 2018 under a regional treaty.
The country needs to cut taxes to help local producers compete with the expected influx of cheap imports, Vietnamese authorities, Japanese embassy officials, and automakers from both countries agreed at a recent meeting, news website VietNamNet said.
Japanese representatives said from now through 2018 the government needs to offer incentives, including tax cuts, to bump up demand and induce auto producers to stay.
If carmakers leave, the Vietnamese market would be taken over by cheap imports from other Southeast Asian countries, they warned.