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Vietnam delays tariff hike on imported auto parts

HANOI, March 31 (Reuters) - Vietnam is delaying a tariff hike on imported auto parts set to start from April 1, a government official said on Monday, but she declined to say when the increase would go into effect. "The tariffs will not be applied tomorrow as previously planned, we are still waiting for final decisions from concerned authorities," the official from the General Department of Taxation told Reuters.

Last month, the ministry proposed a gradual increase to bring the import tax to 30 percent by April 1, 2003, from 20 percent, and finally to 50 percent by 2005.

The sudden proposed hikes raised an outcry from foreign auto makers, who said the action threatens a small but potentially lucrative market and might even shutter some of their plants.

The weekly Vietnam Investment Review quoted an unidentified industry source as saying the decision to increase tariffs on imported auto parts might take effect on July 1. Officials at the General Department of Taxation declined to comment on the report.

Hanoi, struggling with a widening trade deficit, hopes the increase will boost the use of locally made parts.