Nation drowning in sea of fees

VietNamNet Bridge – Despite the objections and concerns of local people and enterprises, the controversial road maintenance fee collection scheme has been finally realized, forcing all car and motorbike owners to start paying a fee of between VND50,000 and VND12.48 million a year from January 1, 2013 despite already being hammered with current taxes, fees and charges.

Photo: VNN

The road use fee was approved earlier this year. It was planned to start collection on June 1 but this was delayed due to concerns that it would only bring a greater financial burden and no improvement in transportation. Last month, when the draft circular was once again discussed, transport organizations and individuals raised more concerns.

Citizens and enterprises have blasted the regulation, seeing the road use fee again a hot topic in local media this week.

While policy-makers always have a good reason to prove that this is a necessary fee, the owners of 35 million motorbikes and 1.5 million cars in Vietnam are extremely concerned that they are going to drown in the sea of taxes and fuel, road maintenance and road fees paid at toll stations, registration fee and vehicle insurance premiums.

As for new vehicles, they would have to bear more tax and fees, such as luxury tax, import tax, VAT (value added tax), environment protection tax and ownership registration tax. All of these fees must be paid for a single unsatisfactory service, traveling on the nation’s horrendous roads.

A reader of Nguoi Lao Dong newspaper says that residents suffer the most disadvantages. It is not pleasant at all to struggle financially from inflation to rising tuition fees and hospital fees while facing too many thoughtless policies and decrees.

Nguyen Huu Nguyen from Southern Economic Study Center echoes this view, saying that it is unreasonable to collect fees on motorbike owners. Many people own several motorbikes but they use only one bike at a time. As the remaining bikes do not circulate on roads, these owners should not be forced to pay these extra fees. Most of all, motorbikes do not affect the quality of bridges and roads.

For businesses, Vietnam Automobile Transport Association chairman Nguyen Manh Hung is afraid that this fee will cut deeply into capital of enterprises and large transport firms with hundreds of cars having to pay a hefty tax each year. Besides, levying fees on vehicles will force enterprises to pay road use fees twice when traveling through BOT toll stations.

In fact, Hung points out that this decree was released without heeding any suggestions of transport firms and associations. As reported by Sai Gon Tiep Thi, a seminar was organized on November 22 as a chance for transport enterprises to raise their voice and ask for support from managing agencies. However, the enterprises fell back into despair when the circular was announced on November 30.

“It is a big disappointment that an important circular affecting up to 40% of the population of Vietnam is released, while no one has any information on it. Up until now all I know is that the circular has been signed but we have no ideas about the signing date and when it was issued,” Hung says.

It seems like the sudden introduction of the road use fee is not only a way to raise funds as soon as possible but also to end disputes and objections of people and enterprises. Thai Van Chung, general secretary of the HCMC Goods Transport Association, is also quoted by the newspaper as saying that the association did not have enough time to respond to the regulation. “The seminar was held on November 22 as we thought that the circular was still a draft and enterprises could still contribute ideas to it. We were blown away for hearing that the circular was issued on November 15, a week before the meeting took place,” Chung explains.

Ignoring all suggestions and concerns of people and enterprises, the Ministry of Finance is still sticking to the road fee collection scheme instead of levying fees on fuel volume consumed. Deputy Minister of Finance Nguyen Thi Minh is quoted by Sai Gon Tiep Thi as saying that the ministry, through this scheme, has shared the burden with society by revising down some fee rates and giving exemptions to the poor and certain types of vehicle. Besides, it will be hard for the ministry to collect fees on fuel consumption as gasoline-run vessels and farming machines do not use roads.

Finally, the road use fee is a good way for the ministry to pass the fee collection hardship to vehicle owners although this scheme, as estimated by many experts, may fail to provide enough funds for road maintenance due to a new costly fee collection apparatus. The burden is still placed on the shoulders of people and businesses despite warnings that they will literally drown in the rough sea of traffic taxes and fees one day.

Truong Tri Minh, vice chairman of Haiphong Goods Transport Association, says that this decree will accelerate the number of bankrupt firms, pour cold water on the economy which is in an extreme difficult time and increase unemployment. Minh adds that up to 40% of transport enterprises in the northern city have gone bust or changed business purposes in recent times, while taxes and fees are killing the remaining struggling firms.

Source: SGT

Vietnam, draft, fees, car, motorbike, traffic taxes