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Bus firm incentives to improve services

Update: June, 13/2013 - 10:04
Long Bien is one of the busiest bus stations in Ha Noi. Preferential taxes and interest fee exemptions for bus firms have been proposed as a way to offer commuters better services.— VNS Photo Thai Ha

HA NOI (VNS)— A Transport Department aims to encourage more Hanoians to use public transport by giving tax and interest fee exemptions to firms to improve infrastructure and services.

Under its proposal, buses used for public transport will be exempt from transport and road maintenance fees. Equipment and vehicles will also be exempt from import taxes.

Local authorities will pay half of all interest fees for the first three years for enterprises that develop bus parking spaces and other infrastructure facilities.

Developers will also be exempt from land-lease fees and will be eligible to access the City Development Fund. Once they are able to generate taxable income, the enterprises will be exempt from corporate income tax during the first four years.

The proposal will also provide discounted tickets for several groups of passengers, such as students, workers in industrial zones and the elderly.

In addition, Ha Noi will approve a cap on parking service fees. Nguyen Thi Thanh Lam, deputy director of the Ha Noi Parking Company, said that the current cost of vehicle keeping was not high. The fare paid for keeping a motorbike, for example, ranged from VND3,000-5,000 (US$0.1-0.2).

As a result, investors remained hesitant about investing in the service.

"Many investors want to invest in vehicle keeping because there will always be high demand for this service. Therefore, if investors are allowed to decide the service cost, they will surely be willing to invest in it," Lam said.

To relieve public concern that giving private investors the right to decide the fee would make parking expensive, the city's transport department director Nguyen Quoc Hung said that local authorities would still regulate the fee.

The Price Management Department under the Ministry of Finance should set a ceiling price on the service to ensure healthy competition among providers, said Thach Nhu Sy, vice chief inspector of the Ministry of Transport.

According to the department, there are currently 687 registered parking spots covering 12.45 hectares. This meets barely 10 per cent of demand and has led to the development of dozens of illegal parking lots, which overcharge drivers.

The plan is expected to be ratified at the People's Council meeting in July. —VNS


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