A recent increase in the specific tax on vehicle imports has slowed down sales and put a dent in profits, dealers claim.
The increase in the specific tax—which went into effect in April—raised this category of excise tax to as high as 65 percent on larger vehicles, pushing the aggregate levy on some new cars to nearly 140 percent.
With the tax reflected in the price of vehicles, buyers could be looking to reduce costs by buying their cars on the grey market, where the specific tax still applies but at more favourable rates.
Pily Wong, CEO of Hung Hiep (Cambodia) Co Ltd, said the number of vehicles sold at his company had declined notably as a result of the tax hike.
“The outlook on car sales for the second half of the year is very negative,” he said. “I don’t foresee good sale numbers.”
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