The Ministry of Finance has completed a draft decree amending several provisions of Decree No. 26/2023/ND-CP on export and preferential import tariffs and submitted it to the Ministry of Justice for appraisal.

The proposed amendments focus on strengthening key policy support for the domestic automotive manufacturing and assembly industry, including extending an existing import tax incentive programme.

Introduced in 2018 and scheduled to run through the end of 2027, the program allows eligible manufacturers to benefit from a 0% import tariff on certain components and materials used in vehicle production and assembly.

The Ministry of Industry and Trade and industry associations have assessed the program positively. Vietnam currently has more than 40 automotive manufacturing and assembly companies, including 16 large-scale businesses with sufficient production and commercial capacity to participate in the programme.

Domestic vehicle production and assembly exceeded 480,000 units in 2025, up 30.4% from 2024 and surpassing the target set under the automotive industry development strategy. In the first half of 2026, output was estimated at 284,600 new vehicles, an increase of 26.9% year on year. Several domestic manufacturers have expanded production and begun exporting certain models.

However, challenges remain, including low localisation rates for passenger cars with fewer than nine seats, the absence of a large-scale parts and components manufacturing ecosystem, and limited targeted incentives for exports.

The global shift towards greener vehicles is also forcing manufacturers to meet increasingly stringent technical standards in export markets.

Based on consultations with ministries, industry associations and businesses, the Ministry of Finance has proposed amendments covering seven main areas of the incentive programme. The key proposal is to extend the scheme by five years, through the end of 2032, giving businesses greater policy certainty for production and investment planning.