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Vietnam to stop collecting road fees from motorbike owners in early 2016

Vietnam to stop collecting road fees from motorbike owners in early 2016

Thursday, October 01, 2015, 10:11 GMT+7

The Vietnamese government has decided not to collect annual road maintenance fees as of January 1, 2016, pending a law amendment, because of the very poor efficiency of the fee collection over the past two years. After months of consideration, the cabinet reached the decision at its monthly meeting held in Hanoi on Wednesday, Transport Minister Dinh La Thang told Tuoi Tre (Youth) newspaper the same day. The cabinet agreed that all provinces and cities will continue collecting the fee until the end of this year before scrapping it on January 1, 2016. The decision followed a proposal by the Central Council of the Road Maintenance Fund that the government should stop charging the fee as the collecting work has not been done as effectively as expected. The proposal was included in a report sent to Prime Minister Nguyen Tan Dung by Minister Thang, chairman of the council, in July this year. The report says that the fee collection in 2013 and 2014 accounted for only 21 percent of the target of each year. “In the first six months of 2015, the fee revenue sharply decreased compared to the same periods of the past many years, and represented only 6.71 percent of this year’s target,” according to the report. The fee collection has been applied since June 2012 under Government Decree 18/2012 dated March 13, 2012 on the establishment, management and use of the Road Maintenance Fund.  Based on the decree, the Ministry of Finance issued a circular to stipulate two fee ranges, including VND50,000-100,000 ($2.2-4.4) per year for electric bicycles and motorbikes with an engine capacity of 50 - 100 cubic centimeters (cc), and VND100,000-150,000 ($4.4-6.7) per year for those with engine sizes of over 100 cc. Based on these ranges, people’s councils in provinces and cities will determine their own rates that fit their social and economic conditions. Under the decree, the people’s committees of wards, communes and towns are tasked with arranging the fee collection, but they have done the task in manners that were neither uniform nor consistent, from fee collection to submission to the state coffers, Minister Thang said. In addition, sanctions and penalties on those who evade the fee have proved unfeasible and difficult to control, the minister added. Currently, while most provinces and cities have been collecting the fee, some others have halted their collection, such as Khanh Hoa, Da Nang, and Ho Chi Minh City, Minister Thang said. Such a situation has caused an inequality among fee payers and led to bad public opinion, he added. In July, the people’s councils of many provinces and cities, including Hanoi, Quang Tri, Da Nang, Khanh Hoa, and Ho Chi Minh City, proposed that the government consider abolishing the fee. At yesterday’s meeting, the government said that such abolition must be subject to an amendment to Decree 18/2012 in the coming time.

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