VietNamNet Bridge – HCMC’s controversial plan to revise up vehicle registration fees could help boost budget collections but not reduce private car traffic in the city, according to businesses and individuals.

Fee burden

The HCMC government has sent the People’s Council of the city the plan to adjust up vehicle registration fees, with the new charge for under-10-seat automobiles over five times higher than the current rate.

Cars and motorcycles are seen on a road in HCMC. The city government plans to increase registration fees on motorcycles and cars of less than 10 seats – Photo: Le Anh

The fee for those cars, which are not used for commercial purposes, would be hiked from the current VND2 million (US$91.6) to VND11 million (US$504) as proposed by the city government.

Meanwhile, trailers and semi-trailers with their own registered number plates would be subject to a new fee of VND150,000, a VND50,000 increase from the current rate.

The city wants to increase the fee from VND500,000 to VND750,000 for motorbikes that cost up to VND15 million each, from VND1 million to VND1.5 million for bikes priced at more than VND15 million to VND40 million each, and by VND1 million to VND3 million for bikes worth over VND40 million.

If approved by the council, the new registration fees would be enforced from September 1.

As explained by the city government, the fee hike would generate more funds for the city to cover road and bridge maintenance and management costs, and discourage the use of private vehicles.

However, many individuals and enterprises have voiced outcries over the plan, saying it is infeasible as motorcycle and auto owners already shoulder a labyrinth of fees.

Do Quang Tri, a resident in Thu Duc District, said the imposition of a road maintenance fee on motorbikes had attracted much criticism, so the registration fee hikes would be treated the same. The Ministry of Transport has proposed that the Government stop collecting the controversial road maintenance fee from motorbike owners.

Tri also questioned whether the city was planning the vehicle registration fee spikes to offset the planned suspension of the road maintenance fee on motorbikes.

Do Xuan Phu, director of Minh Lien Transport Co., said a container truck now bears a lot of taxes and fees.

A fee hike designed to restrict the use of private automobiles may be acceptable but not for container trucks, he said, adding transport firms have bought more trucks as the Government has been getting tough on those violating load regulations.

If the fee hike is passed, transport firms might halt truck purchase plans, and this would affect the economy as goods transport is obstructed, Phu said.

Hanoi’s lesson

According to a representative of a local auto manufacturing joint venture, higher registration fees would not bar people from buying cars. If one could afford to buy a car worth hundreds of millions of Vietnam dong, spending VND9 million more to pay the registration fee would not matter to them.

HCMC should learn a lesson from Hanoi City which has failed in a similar scheme. Despite the registered number plate fee of VND20 million a car, the number of new autos in the capital city has kept spiraling up as high-income earners have strong demand for owning cars.

While Hanoi and HCMC are collecting an auto registration fee of VND20 million and VND2 million per unit respectively, other provinces and cities in the nation impose a fee of a mere VND150,000.

Traffic expert Pham Sanh said HCMC might attain the target of improving its budget collections through the vehicle registration fee increase plan, but reducing private vehicle ownership would prove to be impossible.