The Vietnamese 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 include an extension of the existing import tax incentive programme for the domestic automotive manufacturing and assembly industry.

Introduced in 2018 and scheduled to run until the end of 2027, the programme allows eligible manufacturers to apply a 0% import tariff to certain components and materials used in vehicle production and assembly.

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

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

Challenges include 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 requiring manufacturers to comply with increasingly stringent technical standards in export markets.

Following consultations with ministries, industry associations and businesses, the Ministry of Finance has proposed amendments covering seven main areas of the incentive programme. The main proposal is to extend the scheme by five years, until the end of 2032, allowing businesses to plan production and investment over a longer period under the proposed policy framework.