Finance Ministry proposes extending registration tax exemption for electric cars through 2030

On the draft amendments to the Decree on registration fees, the Ministry of Finance proposes applying the registration tax for electric cars through 2030 to promote green vehicle development, reduce emissions, and protect the environment. The proposal applies to vehicles with purely electric propulsion. In practice, under Decree 10/2022, battery-powered cars pay the first-time registration tax at 0% through 2025. After that, the tax is 50% of the rate for gasoline or diesel cars with the same seating capacity. On February 28, 2025, the Government agreed to extend the 0% rate through the end of February 2027. Thus, the maximum preferential registration tax rate will be extended by more than three years beyond the current regulation. A VF 3 model in Hanoi. Photo: VF 3 Vietnam Association According to data from the International Organization of Motor Vehicle Manufacturers, the ownership rate of cars in Vietnam remains low compared with many countries in the Southeast Asia region, while demand remains high. The Ministry of Finance argues that applying a 0% rate instead of 10–12% as for petrol or diesel cars helps reduce registration costs, increases people’s access, and stimulates consumption. The number of electric cars registered for the first time under this tax has risen rapidly in recent years. In the period 1/3–31/12/2022, 4,040 cars were recorded, averaging 404 cars per month. In 2023, the number surged to 29,281 vehicles, equivalent to 2,440 per month, six times higher than the previous year. The uptrend continued in 2024 with 79,781 vehicles, 2.72 times higher than 2023. By 2025, the number of cars registered increased 2.24 times compared to 2024. Officials say that after four years, electric vehicles have gradually established their position in the market, supporting distributors in selling and enabling enterprises to invest in production and assembly. Environmentally, electric cars do not use fossil fuels, contributing to resource savings and emission reductions. According to the Ministry of Agriculture and the Environment, electric cars help reduce about 0.5 million tons of CO2 equivalent annually. The Ministry of Finance also says that the development of electric cars aligns with global trends. Global sales in 2024 exceeded 17 million vehicles and are expected to exceed 20 million in 2025. Many countries implement tax, fee, and levy incentives to promote consumption and production of electric vehicles, while developing charging infrastructure and supply chains. Evaluating the economic and social situation, the Ministry of Finance also mentions the Iran-related conflict that severely disrupted global energy supply chains. Therefore, applying policies toward this vehicle type also helps encourage consumers to adopt green transport, gradually replacing fossil fuels. Phương Dung