It’s hard for transport businesses to access incentives

Despite receiving much attention, transport businesses are still facing many difficulties in accessing support from the Government.

Circular No. 70/2015 is being revised by the Ministry of Transport in the direction of adjusting the inspection cycle for passenger cars with up to 9 seats, from 18 to 24 months for the first cycle and from 6 to 12 months for the periodical cycle.

The Ministry of Transport has just been assigned by the Prime Minister the task of presiding over, reviewing and proposing policies and solutions to support passenger transport businesses facing difficulties due to the COVID-19 epidemic. Actually, businesses now are falling in trouble of operating related to tax and fee burden and difficulty in accessing support policies.

Many provinces and cities are suffering from the outbreaks of the epidemic had to carry out social distancing activities according to the directive of the Prime Minister in recent years. It leads to the fact that there are many businesses to be disturbed. Chairman of the Board of Directors of Tan Cang Transport Joint Stock Company – Pham Van Tai said that, the revenue of the business has decreased by more than 60%, and many employees have lost their jobs.

Besides, according to Mr. Tai, the regulations on installing cameras under Decree 10 also cost businesses more. Because the price tag of each camera set and the accompanying service fee is about 5,000,000 VND, with a fleet of hundreds of vehicles, this cost is extremely large.

The expenditure of petrol (accounting for 35% of transportation costs) is also considered as one of the big problems of enterprises. Still according to Mr. Tai, “The authorities had better use the Petroleum Stabilization Fund to support businesses at this time”.

The stalled business not only creates direct pressures from operating costs. The expenses about taxes, fees, interest, and insurance fees are also a headache for business operators. The cost of storage and yard is also another big challenge when the transportation of goods through the border gate is getting stuck, both literally and figuratively.

In fact, there have been many policies implemented by relevant ministries and agencies with the aim of removing difficulties and reducing the burden on businesses. However, to enjoy these incentives, businesses still have to pass through a lot of administrative procedures.

For instance, free road maintenance is a problem. Director of Phuc Xuyen Co., Ltd. – Mr. Doan The Xuyen said that his business currently has 300 vehicles that have stopped working, but to access the free road maintenance program, it must pass many cumbersome requirements. For example, the vehicles must be storaged for 30 days or more, and must return the badge and be confirmed by the Department of Transport. “Maybe the time between 2 times of isolation is less than 30 days, then you have to apply for a new badge. Many businesses have got to “endure” to pay even though the car is not running because they are afraid of the procedure,” Xuyen added.

For passenger transport enterprises, operating fees are still increasing in the context that the number of passengers is controlled by no more than 50%, making businesses more and more vulnerable to losses.

According to Mr. Nguyen Van Quyen, Chairman of the Vietnam Automobile Transport Association, the State’s support policies need to be researched specifically for each field, and the conditions should also be simpler.

Mr. Quyen also cited a number of policies that have been issued in the past, but businesses are still difficult to access. For example, the Ministry of Finance issued Circular 112/2020 on reducing road user fees, but BOT investors seemed to not do it, because they thought that the Ministry of Finance needed to have mechanisms and policies with investors when reducing tolls.

According to Quyen, the Government also needs to consider reducing VAT for transport businesses and cooperatives by car to 0% for the whole year of 2021, and banks should continue to lend policy packages with special preferential interest rates for transport units to restore production and business.

Mr. Quyen also suggested that the deadline for installing cameras on passenger cars and tractors should be pushed back to July 31, 2023.

Regarding the proposal to reduce BOT fees, Mr. Tran Bao Ngoc, Director of the Transport Department (Ministry of Transport), said that Circular 112 stipulates the level of road use fees (tolls collected per vehicle) for transportation business.

The collection of road service charges is not subject to the provisions of this Circular, so investors are not required to do so.

The Ministry of Transport also proposed to the Government to delay the time of sanctioning transport enterprises that do not install surveillance cameras due to the impact of the COVID-19 epidemic.

Regarding the proposal to exempt the road maintenance fee payment until the end of this year, according to Mr. Ngoc, Circular 112/2020 of the Ministry of Finance allows reducing the road user fee from January 1 to the end of June 30. In 2021, this extension will be under the authority of the Ministry of Finance. The Ministry of Transport will coordinate with the Ministry of Finance to comment on the content of drafts and circulars related to regulations on the rate of collection of some fees and charges to

In particular, the Ministry of Transport has proposed to the Government to continue to have more solutions to support transport enterprises to restore production and business such as: reducing VAT to 0%, reducing 50% of corporate income tax for transport enterprises. For industries damaged by the epidemic, increase the 6-month tax payment extension for the outstanding tax amount until December 31, 2021 and do not collect fees for parking, parking, picking up passengers at airports and railway stations, reducing 50% service price via bus station with bus.

Regarding the solution to remove the vehicle inspection cycle, the Ministry of Transport is amending Circular No. 70/2015 in the direction of adjusting the inspection cycle of passenger cars of all kinds up to 9 seats with transportation business, regulated by the Ministry of Transport adjusted from 18 months to 24 months for the first cycle and from 6 to 12 months for the recurring cycle.

In addition, the Ministry of Transport also proposed that the Government delay the time to sanction transport enterprises that do not install surveillance cameras due to the impact of the Covid-19 epidemic.