Burning and throwing votive offerings around has been a common spiritual practice among many Vietnamese who believe even the dead need some sort of financial support.
But Da Nang government now wants that practice to end, calling it "littering" and "going against urban culture."
It said funeral service providers will be fined or even have their license revoked if they use or let their clients use votive paper offerings on the streets.
First-time violators will be fined between VND1-2 million (US$45-90) and repeated offenders will be banned from operating funeral services.
The city launch anti-votive paper campaign in July, which has won widespread support from the public, local media reported.
A manager of the city’s cemetery told Tuoi Tre that very few funeral parades used votive offerings now.
"But we may need a few more months to get everybody on board."
A source from Da Nang’s environment department said the use of votive offerings has created more work for street cleaners.
The city has between 25 to 40 funerals a day, and traditionally each can use up to 35 kilograms of votive offerings.
Thuy, a street cleaner, said she often had to sweep a street several times because many funeral parades left behind a lot of votive paper.
“One day I finished sweeping a street, but when I returned I saw it covered in votive money, salt and rice. I cried because I had to clean the street again.”
Tran Thanh Nhon, a senior police officer, told Tuoi Tre the practice is not only costly, but also dangerous.
Some families throw out real money among the fake notes to attract a crowd and some children ran out to collect the real notes, he said.
Official figures in 2010 show that Vietnamese people burn tens of thousands of metric tons of votive paper every year.
People in Hanoi spent the most on votive offerings, around VND400 billion ($20.6 million) a year.