Prime Minister Nguyen Xuan Phuc has instructed the Ministry of Finance (MoF) to look at taxes and fees related to automobile manufacturing and assembly in order to help the sector grow.

The PM also asked relevant ministries and departments to create good conditions to help the industry “take advantage of latecomers” by developing the local engineering industry and joining the global value chain.

That involved helping enterprises access information, advanced technology and the application of new technologies such as robotics, 3D printing and self automation to improve productivity and competitiveness.

The Ministry of Science and Technology has been tasked with stepping up research and development to manufacture high-tech products and to expand scientific and technological co-operation with strategic partners.

Regarding taxes and fees, the Government leader requested the MoF to submit a proposal with amended policies to help automobile manufacturers and assemblers increase the domestic value ratio, reduce costs, and increase competitiveness against imported Complete Built-Up products.

The PM also instructed the MoF to offer import tariff incentives for parts used to assemble environmentally-friendly cars.

Earlier this year, the MoF announced a plan to add electric cars to the list of incentive tax beneficiaries, saying it would encourage the development of the local car industry.

Up to now, there are no Vietnamese businesses manufacturing or assembling environmentally-friendly vehicles, which the ministry defines as electric, hybrid, biofuel or compressed natural gas powered.

There are 358 businesses in the auto industry, but the country imports over 90 percent of its auto parts. Most cars sold in the country are foreign brands imported or assembled locally.

Most recently, Hanoi was struck by unsafe levels of pollution, making it among the worst in the world, with environmental authorities reporting that levels of PM 2.5 – tiny air particles – had reached a five-year high. 

According to data, 70 percent of the volume of gases emitted into the environment comes from motor vehicles. There are many outdated vehicles which emit a huge amount of gas in Hanoi and Ho Chi Minh City.