Finance Ministry rejects rise in vehicle fees

HCM City (VNA) - The Ministry of Finance has turned down a proposal by the HCM City People's Committee which aimed to reduce traffic jams in Hanoi and HCM City.

The proposal sought to raise vehicle-registration fees and introduce a new "driving
fee". It also asked for an increase in penalties for traffic violations.

The proposal requested that the registration fee for motorbikes be raised fot 1
million VND from its current level of 500,000 VND, and for cars, to 50 million VND
instead of the current 2 million VND.

The proposed annual driving fees for HCM City were 500,000 VND per motorbike
and 10 million VND per car.

According to the proposal, ward and commune level authorities would collect these
fees. Invoices for the fees would be shown to the police when a driver presents his
papers for inspection. If a driver doesn't have the necessary invoices, he would be
fined up to 250,000 VND for motorbikes and 5 million VND for cars.

The finance ministry was also asked to increase parking fees to 20,000 VND and
30,000 per car parking session and 500,000 VND per car per month.

In a letter to the city People's Committee, MoF Deputy Minister Hoang Anh Tuan said
that the proposal was irrational. Moreover, he added, the driving fee was contrary
to current law.

He also said that the proposal fee policies would not help reduce traffic congestion
in major cities.

If registration fees in Hanoi and HCM City are increased to such high
levels, he wrote, vehicle owners would simply register their cars and motorbikes in
neighbouring provinces, but still continue to use them in the cities. As a result,
the number of vehicles in major cities would not be reduced, and three will be no
reduction in traffic.

Tuan also said that the nation's laws do not contain any regulations on "driving
fees" for vehicles, so this portion of this city's proposal is groundless.

The finance ministry also rejected the proposal hikes in parking fees.

Vu Van Truong, director of the Tax Policy Department, said that the MoF did not
agree with the city's proposal since the fees were not included in a national decree
issued by the Prime Minister.

"An increase in registration fees should be applied nationwide, and not only in
Hanoi and HCM City ," Truong said.

Almost immediately after the People's Committee aired the proposals, it received
widespread disapproval from the public.

" They [the People's Committee] really did not consider the daily travel demands
of millions of ordinary people, especially those with lower incomes. How will they
get around, if they cannot afford to drive private vehicles?" said Le Trong Nghia,
a financial analyst.

"Buses are not the right choice as the city fleet consists of only 3,200 vehicles
and only 14 percent of the roads are said to be up-to-standard for business.
Besides, the buses do not run 24 hours a day like in many overseas cities," he
added.

The deputy chairman of the HCM City Fatherland Front, Le Hieu Dang, said the
increased number of vehicles on the streets was not to blame for traffic congestion.
Instead, it was poor urban management and underdeveloped roads.

HCM City has about 4.2 million registered motorbikes, including 700,000 from
neighbouring provinces, and nearly 800,000 registered cars. 1,100 new motorbike
registration applications are sent in every day.

The municipal Transport Department admitted that the city's road system can only
handle 2.5 million vehicles.-Enditem