by Thuy Anh
(VNS) A proposed circular on the road-maintenance fee from the Ministry of Finance, expected to come into effect early next year, is causing alarm among transport companies.
"[The fee] will increase the number of transport companies going bankrupt, which will have serious impacts on society, including increasing the unemployment rate," Truong Tri Minh, vice chairman of the Hai Phong Cargo Transport Association warned.
Companies in the sector already have to pay taxes on vehicles, registration, and number plates, verification fees for the vehicles, income tax, and others, he said.
Around 40 per cent of the 2,000 cargo transport companies in his city have either gone bust or switched to other businesses due to economic difficulties, he claimed.
Tran Huy Hien, general secretary of the Viet Nam Freight Forwarders' Association, said the increase in transport costs due to the new fee would push up prices and, thus, affect competitiveness vis-a-vis foreign firms.
The draft envisages monthly fees of VND130,000 to VND1.04 million (US$6-50).
Industry insiders also complain that allocating 1 per cent of the fee to the registration and inspection centres, 3 per cent to the Viet Nam Register, and 15-30 per cent to localities would significantly reduce the investment in road building and maintenance.
They want to know how the money will be managed and the road quality improved.
The draft also requires payment in advance for a 12-month period, which businesses consider unfair.
Participants at the seminar held to collect opinions about the draft agreed that the Government should consider delaying introduction of the fee to support them at this difficult time.
Measures to boost market
The gloom surrounding the Viet Nam stock markets could lift next year since the Ministry of Finance and the State Securities Commission are considering measures to ensure sustainable growth of the market.
SSC chairman Vu Bang said they include a likely 20 per cent reduction in the securities depository fee from early next year, though he insisted that the current fee of half a dong per share per month was reasonable.
Securities companies normally pay the fee instead of passing it on to their customers.
Sai Gon Securities Inc said the fee cost it VND14 billion (US$667,000) in 2010 and 2011.
Brokerages want some reduction in the fee due to the fact that many of them have been suffering losses.
Increasing the margin ratio from 40:60 (which means a securities company can lend a customer 40 per cent of the amount required to buy a share) to 50:50 is under consideration. If approved, it is likely to improve liquidity.
The SSC is preparing to introduce several new products next year, including exchange-traded funds.
ETFs are mutual funds that track indexes like the Dow Jones on the New York Stock Exchange, for example. When people buy into an ETF, they buy shares of a portfolio that tracks the index. The shares are traded on stock exchanges just like all other securities.
Pension funds with their important role in social security would also be studied, Bang said.
But the bottom line is that any recovery depends on the economy.
Property values to go online
From the first quarter of 2013 HCM City real-estate investors can refer to official indexes to be posted on the web sites of the Department of Construction and HCM City Real Estate Association, and in the media.
They will be released on quarterly and yearly bases.
The city People's Committee has already issued regulations for creating and publishing the indexes, which will also include prices and other details of transactions.
There will be indexes for different types of properties and for different areas of the city.
The Construction Department has been entrusted with working out the database and calculating and creating the indexes. It is likely to hire competent agencies to do the work.
Property services company Savills Viet Nam recently launched its own price indexes for the residential segment, the QoQ (quarter-on-quarter) and QoB (quarter-on-base) indexes, with the first quarter of 2009 as the base.
They are based on a sample of more than 200 primary and secondary projects in the city. The company admitted it is not easy to obtain the exact prices of transactions.
The People's Committee has also classified apartments – those priced at VND60 million (US$2,850) per square metre and above; VND30-60 million; VND15-30 million; and below VND15 million.
These rates include value-added tax and will be adjusted annually depending on market prices. — VNS