Ministry of Finance proposes extending special consumption tax incentives for electric vehicles to the end of 2030

The Ministry of Finance is drafting a resolution to extend special consumption tax (TTĐB) incentives for battery-powered electric vehicles through the end of 2030, keeping preferential tax rates at 1% to 3% depending on vehicle type.

Current TTĐB schedule for battery-powered EVs

Under existing regulations, the TTĐB rate for battery-powered electric cars is set by passenger capacity. From March 1, 2022, the rates are:

• 3% for vehicles with 9 seats or fewer
• 2% for passenger vehicles with 10 to under 16 seats
• 1% for passenger vehicles with 16 to under 24 seats

From March 1, 2027, the rates increase to 11%, 7%, and 4% respectively for the same seat brackets.

Why the Ministry proposes extending the incentives

The Ministry says the current preferential TTĐB level for electric cars (1% to 3%) is low compared with fossil-fuel vehicles (10% to 150%), which helps consumers buy EVs through tax incentives and supports lower prices. For businesses, it argues that higher sales can drive investment, expand production, and improve business operations.

Tax authority data cited by the Ministry show that the number of battery-powered under-24-seat vehicles imported or domestically produced increased from 7,663 in 2022 to 179,316 in 2025. Over the same period, state budget revenue from this vehicle group rose from 213.38 billion VND to 2,371.97 billion VND.

The Ministry also links the proposal to Vietnam’s COP26 commitments, saying extending preferential TTĐB through 2030 would maintain policy consistency with environmental protection and sustainable development, while reducing dependence on fossil fuels amid price volatility.

It further argues that continuing to promote battery-powered EVs is a key measure to cut greenhouse gas emissions, reduce urban pollution, and gradually replace fossil-fuel-powered vehicles in line with Vietnam’s international commitments.

Proposed TTĐB rates through 2030 and changes from 2021

In the draft, the Ministry of Finance proposes extending the TTĐB incentives for under-24-seat battery-powered vehicles with the following rates and effective dates:

• Passenger cars and four-door passenger vehicles with 9 seats or less, and passenger-carrying pickups: 3% through December 31, 2030; from January 1, 2031, 11%.
• Passenger cars and four-door passenger vehicles with 10 to under 16 seats: 2% through December 31, 2030; from January 1, 2031, 7%.
• Passenger cars and four-door passenger vehicles with 16 to under 24 seats: 1% through December 31, 2030; from January 1, 2031, 4%.
• Double-cabin pickup trucks, vans with two rows or more, and vans with a fixed partition between the cabin and cargo area: 2% through December 31, 2030; from January 1, 2031, 7%.

Industry view and expected market effects

The Ministry of Industry and Trade said that maintaining preferential TTĐB at 1% to 3% through 2030 would continue to boost the adoption of battery-powered EVs, particularly in the 9-seat and smaller segments.

Budget impact estimate

The Ministry of Finance estimates that extending TTĐB incentives through 2030 would reduce state revenue by about 10 trillion VND per year. It breaks this down into:

• Domestic TTĐB revenue decline of about 8.8 trillion VND per year
• About 100–200 billion VND per year from imports
• Value-added tax reductions of about 900–1,000 billion VND per year

The Ministry notes that these estimates do not include potential effects from reductions in TTĐB, value-added tax, or registration fees for gasoline-powered vehicles as EV adoption grows and the number of gasoline vehicles declines.