Proposed Road Use Fee Carefully Studied

Proposed Road Use Fee Carefully Studied

After the government has signed the decree on road-use fee collection, the Ministry of Transportation is set to implement it under the Law on Road Traffic (promulgated in 2008). As talks about the charges started circulating to the public, several concerns mounted from different public sectors as to the amount to be collected, how collection is done and where the funds are to be used. Upon calculation, however, the new fee is found not have a strong impact on motorists as it is very minimal in comparison with the transport fee.

Basic road-use collection level for automobiles was proposed at VND180,000 ($8.5) per month, according to Ministry of Transport’s (MoT) Financial Department. This benchmark is applied to under 10-seat cars, ambulances, vans, hearses, trailers less than two tonnes in carrying capacity and equivalents. The MoT will develop a fee ladder for cars with more seats or bigger carrying capacity based on the basic cost. From its initial proposal, cars with 10 to 24 seats, trucks and trailers from two to seven tonnes in carrying capacity is subject to VND270,000 ($12) per month in fees. For cars of more than 25 seats, trucks and trailers from seven to under 10 tonnes in carrying capacity and specialized cars, fees are set at VND386,000 ($18) per month. Cars from 10 to under 18 tonnes in carrying capacity will be charged VND720,000 ($34) per month, above 18 tonne cars at VND1.44 million ($68.5) per month, trailers under 25 tonnes in carrying capacity at VND324,000 ($15) per month and trailers over 25 tonnes in carrying capacity at VND1.044 ($49) million per month.

Motorbikes will be subject to four fee levels, instead of three as previously proposed. The cost is set at VND80,000-120,000 ($3.8-$5.7) per month for under 70 cubic centimeters motorbikes, from VND100,000-150,000 ($4.7-$7.1) for 70cc to 100cc motorbikes, from VND120,000-180,000 ($5.7-$8.5) for 100cc to 175cc motorbikes and from VND150,000-225,000 ($7.1-$10.7) to over 175cc motorbikes.

With the road-use set at reasonable scales, the concern surrounds on how the funds are used after they're collected. The money is set to improve traffic infrastructure, so travel costs will be lower due to convenient transport and lower fuel consumption. The ministry believes that the quality of roads must be improved gradually. Comprehensive repair and maintenance of the roads will be implemented.

Car owners will pay the road-use fees at registration agencies. Owners will be able to pay the fee directly or pay at their vehicle registration deadlines with the flexible schedule of one month, quarterly, semi-annually and annually. Fee contribution plans may even be available for those who prefer to pay on 18 months, 24 months and even 30 months.

Vehicle owners will get certificates after paying off the fee. To ensure transparency of the disbursement of fees collected, a non-governmental fund management board will be set up such as the Viet Nam Chamber of Commerce and Industry, and units will also be established in localities to oversee the expenditures. Additionally, plans on how the funds are to be used are required to be set to public.

The Directorate for Roads of Vietnam (DRRVN) is devising a plan on innovating road maintenance work throughout the country under which the activities will be put on auctions slated to be open to businesses from assorted economic sectors.