This is the second time the committee has suggested taxing motorists after its proposal last year was rejected by the Government.
 

The committee proposed raising the registration fee for motorbikes from VND500,000 (USD 28.5) to VND1 million (USD 57) and for cars, from VND2 million (USD 114) to VND50 million (USD 2,857). It also suggested that motorbike users be charged VND500,000 (USD 28.5) a year and car drivers, VND10 million (USD 570).

 

The committee also suggested increasing parking fees in urban areas. However, the proposal was rejected on the grounds that it contravened the law, Deputy Minister of Finance Hoang Anh Tuan said in a letter to the authority.

 

According to the HCM People’s Committee, HCM City, which has a road area of 25,600sq.m, has a population of more than eight million.

 

Nguyen Manh Hung, chairman of the Viet Nam Automobile Transport Association, said the proposal was unreasonable and blamed congestion on poor infrastructure.

 

"Traffic congestion cannot just be blamed on the increasing number of vehicles on the streets." said an official from the Ministry of Finance’s Tax Policy Department. He also criticised proposals to install an Electronic Road Pricing (ERP) system as a form of congestion charge.

 

Pham Xuan Mai from HCM City’s Technology University said the cost of installing the system would be prohibitive.

 

Nguyen Quang Toan, former chief of Ha Noi Transport University’s Road Faculty, said authorities should focus on improving urban infrastructure. He also said raising registration fees would contravene Government Resolution No 58. "The resolution says vehicle registration fees should be cut by 50 per cent to boost consumption," he said.

 

Decree No 80 stipulates that registration fees should be 10 to 15 per cent of the vehicle’s cost. At present, it is 10 per cent, he said.

 

"If the fees are increased in HCM City and Ha Noi, people would register their vehicles in neighbouring provinces. The number of vehicles, therefore would not go down," he said. "To deal with traffic jams the road system and urban infrastructure should be upgraded."

 

Pham Xuan Mai, head of HCM City Technology University’s Transport Technique Department, said proposed vehicle taxes should be carefully considered.

 

According to a recent report, there are more than 4 million vehicles in HCM City – 3.7 million motorbikes and 371,000 automobiles.