Vietnam plans to raise car registration fee in crowded metros

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Vietnam authorities are considering raising car registration fees in Hanoi and Ho Chi Minh City to 20 percent in an attempt to reduce car imports and ease traffic.


The Ministry of Industry and Trade has sent the proposal to concerned agencies, news website VnExpress said Thursday.


Hanoi currently has car registration fee of 12 percent of the sales price and Ho Chi Minh City 10 percent.


The Vietnam General Taxation Department and Vietnam Customs have both agreed with the proposed registration fee.


In September, the Finance Ministry raised the cap for car registration fee from 15 to 20 percent, which was followed by Ho Chi Minh City announcing plans to raise its fee from 10 percent to between 12 and 15 percent.


The ministry estimates that vehicle registration fees contribute an average of VND7 trillion (US$333 million), or 2.5 percent, every year to the state budget.


The contribution has increased from more than VND3.3 trillion in 2006 to VND9.2 trillion last year.


Another statement from the Ministry of Industry and Trade was also sent to the National Assembly, asking the parliament's advice about raising the special consumption tax from the current 45-60 percent on cars under nine seats.


But the general tax department said it's not easy to raise this tax since it would involve amending different laws.


Hanoi now has nearly 400,000 cars, and some four million motorbikes, with cars using 55 percent of the road space and 65 percent of all parking space during peak hours, Khuat Viet Hung, head of the Department of Transport Planning and Management at the University of Transport, told Thanh Nien Weekly in an interview last month.


According to Vietnam Registar, between January and July this year, Hanoi licensed an additional 4,000 cars each month.


Ho Chi Minh City meanwhile is home to more than 500,000 registered cars, and this is forecast to surge to 800,000 in 2018.


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