Delay new infrastructure fee by 12 months, HCMC businesses plead

By Thi Ha   June 25, 2021 | 05:08 am PT
Businesses in Ho Chi Minh City have requested a new fee on port infrastructure be delayed by 12 months or longer instead of three amid the Covid-19 pandemic.

Vu Huy Quang, director of sales and exports at food manufacturer Saigon Food, said the infrastructure fee should be imposed at least one year after Vietnam had reached herd immunity.

"The current fee is too high. As our companies need to import two containers of materials to make one container of products, the new fee will triple current costs," he said, adding the city should cut the fee by half.

He was referring to the city’s new port infrastructure fee earlier planned for July 1, but which got pushed back three months to Oct. 1.

Under the new regulation, HCMC will collect from VND15,000 ($0.65) to VND4.4 million ($191) per ton of goods transported through its ports, which it plans to use to fund infrastructure projects to ease traffic congestion near these facilities.

But many companies have voiced concerns.

Vietnam Logistics Association (VLA) has requested the fee be imposed in July next year so not to create a burden on businesses while they struggle to survive the pandemic.

The fee, if imposed now, would lower Vietnam’s competitiveness in trade, it added.

An anonymous CEO of a seafood company in central Khanh Hoa Province said his business has to pay billions of Vietnamese dong (VND1 billion = $43,400) every year, and that a 12-month delay in the new fee imposition would not even help, not to mention three months.

"We are already devastated by the pandemic."

Chu Tien Dung, chairman of the HCMC Union of Business Association, said the fee should be scrapped as businesses are already burdened by logistics fees.

"A 12- or 3-month delay does not help. The city should consider reducing fees for businesses while logistics costs remain high. Businesses are already paying many taxes and fees and have to bear vaccination costs for their employees."

Nguyen Chanh Phuong, deputy chairman of the Handicraft and Wood Industry Association of Ho Chi Minh City, said it is unclear how the city came up with the fee.

Until new infrastructure projects are built, fees should not be collected, he said, adding that even then, only companies that use the new infrastructure should pay the fees, not all.

Economist Dinh The Hien said the new fee would put a greater burden on businesses while the city has yet to publish any concrete plans on expanding its infrastructure.

In other countries, authorities often collect fees only after infrastructure has been built, while only companies that use the infrastructure are required to pay.

This plan to collect fees should be suspended, he stressed.

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