VietNamNet Bridge – The HCMC Department of Transport has proposed starting collection of a road maintenance fee from nearly six million motorcycles in the city on January 1 next year.

Motorcycles flood a street in HCMC at rush hour. Owners of nearly six million motorcycles in the city will have to pay a road maintenance fee from next year if this is passed by the HCMC People’s Council

The department suggested lower road maintenance fee levels than initially proposed in its recent report sent to the HCMC People’s Committee in preparation for submission to the HCMC People’s Council for approval next month.

With motorcycles of less than 100 cubic centimeters, the proposed charge is VND50,000 per year, VND10,000 lower than previously proposed. The respective fees planned for motorcycles of 100-175 cubic centimeters and over 175 cubic centimeters are VND120,000 (down by VND30,000) and VND150,000 per year.

Vehicles transporting goods and installed with one cylinder engine should pay an annual road maintenance fee of VND2.16 million.

If these suggested fee levels are approved by the HCMC People’s Council, the department will begin fee collections from next year and district-level authorities will be in charge of the collection job.

Statistics of the department showed that as of early this year, the city had over 5.8 million motorcycles, excluding over one million owned by migrant workers from other localities. With the lowest fee of VND50,000 per year as proposed by the department, the city would be able to collect VND290 billion for road upgrade and repair.

HCMC is one of the only three localities nationwide yet to apply the road maintenance fees while it is fairly short of finances to maintain roads as its current road maintenance fund can meet only 20% of the needs. However, the fee collection may face challenges and expected collections may be low.

Relevant regulations state that fee revenues would be used to maintain and repair roads managed by provinces and cities. Localities are allowed to retain 10-20% of total revenues to cover expenses for the collection job.

Hanoi started applying the fees in its 29 districts and towns in August 2013 and owners of around 4.5 million motorcycles in the capital city paid VND55 billion last year, or some 21% of the target, Thanh Nien reports.

Under the Hanoi People’s Council’s resolution, authorities of wards can retain 10% while communes are allowed to get 20% of the collected amounts to cover costs arising from fee collections. But, the total collections are modest while the cost for maintaining the apparatus in charge of this job is high.

In HCMC, the authorities of wards and communes have also expressed concerns over possible objections by motorbike owners and being incapable of handing such a new task.

At a meeting held by the National Assembly’s (NA) Finance and Budget Commission last April, many NA deputies requested the Government to ponder stopping collecting the road maintenance fee. Motorcycles are the vital means of transportation and if revenues are not high while the management cost is huge, the fee collection should be called off.    

Source: SGT