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Government considers changes for Law on Fees and Charges

Update: October, 27/2015 - 10:22

Pham Dinh Thi, director of the Department of Tax Policy under the Ministry of Finance, spoke to the Viet Nam Economic Times newspaper about proposed changes to the draft Law on Fees and Charges.

The proposed Law on Fees and Charges did not mention hospital and tuition fees. Does that mean they would be regulated by a price mechanism?

Government Decree 16/2015/ND-CP highlighted the autonomy given to hospitals, education institutes and vocational training centres. It was done according to a plan to apply a price mechanism in the management of public services with funding coming from the State's budget.

The Government intended to switch to a price mechanism in order to encourage private-public partnership projects and attract investment to improve the quality of public services. That's why they were not included in the proposed Law on Fees and Charges.

At the same time, measures were also taken to ensure that the Government's policies will continue to protect poor and vulnerable groups in society - impoverished households, ethnic minorities and residents in remote and isolated regions - from adverse effects in implementing a price mechanism in the public services provision.

Pavements and streets in big cities are being utilised for other purposes such as parking spaces. Do you think that could result in traffic hazards and a lack of transparency in the handling of the income generated?

The utilisation of pavements and streets as parking spaces came from a real demand of our urban every day life, especially in big cities where there was a large demand for parking spaces that public parking lots could not meet. It is also a common practice in many countries around the world.

Under the Viet Nam Law on Road Traffic, utilisation of pavements and streets were within the jurisdiction of city-level or province-level People's Committee.

Local authorities may then allow pavements and streets to be employed as parking spaces and collect fees as an income source. However, they were also responsible for the management of income sources in accordance with current regulations and in the spirit of transparency, as well as maintaining traffic order and traffic safety.

There has been talk about allowing local authorities to collect fees and charges besides those listed in the Law on Fees and Charges in consideration of localities' characteristics. What were lawmakers' opinions on this particular matter?

The whole idea behind having a list of applicable fees and charges was to ensure uniformity in fee collecting and management across the country and to avoid situations in which localities came up with their own fees and charges that may burden people unnecessarily.

Therefore, the consensus among lawmakers was to not allow localities to do so unless it's absolutely necessary and only when it's beneficial and suitable with local socio-economic development. Local authorities may present their cases in front of the Government and the National Assembly for consideration.

In regard to the registration fee, there has been feedback to exclude it from the Law on Fees and Charges due to the fact that it may be considered a form of asset tax. What's your view on this?

The registration fee is directly related to asset management and is calculated as a percentage of the asset value. There are many countries in the world collecting fees and charges when assets were registered, but the methods may vary from case to case.

In Viet Nam, the registration fee contributes a considerable amount to the State's budget, roughly VND15 trillion (US$672 million) annually. As proposed in the draft Law on Fees and Charges, the Government and the People's Council were tasked with building a list of fees and charges including registration fees for passenger cars with less than ten seats and motorbikes. — VNS

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