Financial group proposes new vehicle ownership fee in Vietnam

A new fee should be introduced to curb the use of cars, a group of financial investors say.

The Vietnam Association of Financial Investors has proposed that the government impose an ownership fee of up to 10 times a vehicle’s worth to curb imports and traffic congestion in the country.

The association, a group of 63 Vietnamese banks and funds, said imports of products like cars and motorbikes are not encouraged, but more and more foreign vehicles have been coming into the country. “Each year the country spends billions of US dollars to import them,” it said.

Apart from current import and luxury taxes, a new fee should be introduced to curb the use of such vehicles, said the group, also known as VAFI.

It said owners of luxury cars and motorbikes should be charged between two and 10 times of the vehicle’s value. Vehicles used in public transportation and those of low value can be exempt from the new fee, the group suggested.

Nguyen Hoang Hai, general secretary of the association, told news website VnExpress on Thurday that consumers have the right to buy whatever vehicle they want. “But when traffic gridlocks, pollution, trade deifict and the draining of foreign reserves are worsening, I believe the country needs this new fee,” he said.

Vietnam’s trade decifit widened to US$1.7 billion in May from a $1.49 billion shortfall in April.

VAFI also proposed a ban on licensing new automobile plants, saying the country already has more vehicle manufactures than it should.

The VnExpress newswire reported that many industry insiders have criticized the proposal. They said it looks like VAFI is trying to “challenge” Vietnamese consumers because it’s impractical to force car owners to pay a fee that is 10 times higher than the price of a car. – Thanhnien

Tags: Vietnam vehicle ownership fee