The automobile registration fee in the capital city will be increased from 10 per cent to 12 per cent of the retail price of the vehicle, effective January 1, under a decision by the Ha Noi People’s Committee.

The move will give Ha Noi the highest auto registration fee in the nation, but it will still fall short of the 15 per cent which the Ministry of Finance recently urged upon Ha Noi and HCM City as a measure to control the number of vehicles on the cities’ roads to ease traffic congestion.

The increase would hit Ha Noi’s taxi fleets particulary hard, said Ha Noi Taxi Association chairman Do Quoc Binh.

“Increasing registration fee for taxis is unfair and unreasonable and will have a huge negative impact on taxi firms in Ha Noi, causing some to face losses and possible bankruptcy,” said Binh.

Binh noted that the fee was already raised from 8 per cent to 10 per cent in August of this year.

He argued that taxis were an important means of public transportation, yet taxi operators already receive no special tax breaks, despite contributing a large amount of tax revenue to State budget.

He pointed out that the value-added tax (VAT) on taxi services was also slated to rise from 5 per cent to 10 per cent on January 1, giving taxi operators little leeway to further raise taxi fares.

HCM City Taxi Association chairman Dinh Quang Hien also said that, even though petrol prices had fallen from VND19,000 per litre last July to the curent VND11,000, all other costs had continued to rise by as much as 40 per cent in the past year, including the costs of batteries, tyres, and other parts.

Future Star Taxi Co director said that petrol prices accounted for only 30-35 per cent of costs, with the remainder made up of such things as insurance, taxes and fees, parts and servicing.

Vinasun Taxi Co deputy director Ta Long Hy said most taxis now charged fares of VND10,000 per kilometre, a rate that is sure to be raised if input costs cannot be controlled. (VNS)