Vietnam will raise license plate registration fees for cars to up to VND20 million in an attempt to reduce traffic gridlocks in the country's two largest cities, Ho Chi Minh City and Hanoi.
The sharp increase from the current VND2 million per car would be effective in February for cars with less than 10 seats, the government said in a report on its website Friday.
The Finance Ministry has also decided to hike the license plate fees on motorcycles to as much as VND4 million per vehicle depending on their value. The current fee is just VND500,000 per motorcycle.
Vu Van Truong, director of the Ministry of Finance's tax policy department, told Tuoi Tre newspaper on Friday that the decision to raise the fees was based on proposals made by Ho Chi Minh City and Hanoi, which are struggling with their fast expanding number of vehicles.
"To a certain extent, the fee hike will adjust (car) consumption and it is one of the measures to help reduce congestion in the two cities," Truong said.
He noted that vehicles used by transport companies are not affected by the new fees.