Higher fees aim to reduce car traffic

Hanoi (VNA) - Automobile registration fees in Hanoi were raised from 10 percent
to 12 percent on Jan. 19. The new fee applies to vehicles that have less than 10
seats.

The fee rise makes Hanoi one of the most expensive places in Vietnam to
register a car, although the fee is still lower than 15 percent fee rise proposed by
the Ministry of Finance (MoF).

The rise follows an initial fee of 5 percent regulated in Decree No80/2008/ND-CP,
which was passed on July 29 last year.

Municipal authorities said that higher registration fee was aimed at better
controlling the number of vehicles on city streets and would help in discouraging
car use and easing traffic congestion.

With the new registration fee, an auto worth 10,000 USD will come with a
registration fee of 1,200 USD while an auto worth 50,000 USD has a registration fee
of 6,000 USD.

The Ministry of Industry and Trade (MoIT) had suggested postponing the new
registration fee in order to spread consumer confidence in the auto sector, which
reported large quantifies of cars in stock.

However, Hanoi Taxation Department authorities said the new fee had to be applied,
as it was already ratified by the city People's Council.

MoIT also suggested the Government delay rising special consumption tax and value
added tax on autos.

Hanoi Taxi Association chairman Do Quoc Binh said increasing the registration fees
was unfair and would have a negative impact on business activities for taxi firms in
Hanoi .

"Some taxi companies may even to bankrupt," he said.

According to the association, although taxis are considered as public transport and
therefore taxi companies neither receive Government support nor enjoy any tax
incentives while they contribute hundreds of million of dollars to the state budget
each year through a raft of taxes.

"The association will organise a meeting on an official petition to reverse the
illogical new fee level," said Binh.-Enditem