Low-income earners burdened by high fees
23-09-2015 13:47:27+07:00
Low-income earners burdened by high fees
Vietnamese now have to spend 21.4 percent of their total monthly living expenses, according to Numbeo, the database on living costs.
Tuoi Tre newspaper reported that with VND15,000 per kilometer for a five-seater car and VND16,000 per kilometer for seven-seater cars in HCM City, the taxi fee in Vietnam had left other regional countries far behind.Vietnamese have to spend 1/5 of their total income on travelling, while the remaining 4/5 is used for other items from food to electricity and water, from clothes to entertainment services.
Meanwhile, in Singapore, which is believed to have the highest living costs in South East Asia, the taxi fee is VND8,700 per kilometer, half of the charge in Vietnam.
The taxi fee in Cambodia is also lower than in Vietnam. Cambodians pay VND12,000 for every kilometer, while transport costs account for 15 percent of their total monthly spending.
Thailand has the lowest taxi fee, VND5,000 for every kilometer, just 1/3 of Vietnam. Therefore, transport costs account for 13.2 percent of Thai total monthly spending.
High transport costs are cited as the main reasons behind Vietnam’s low competitiveness of products.
Le Van Ngai, director of Son Ha Fine Arts Company, said that transport and logistics costs in Vietnam account for 20 percent of companies’ expenses, much higher than the global average of 13 percent.
This explains why farmers can sell water melon at VND500 per kilo, while merchants at traditional wholesale markets can sell them at VND8,000 per kilo, 16 times higher. The retail price could be as high as VND14,000 per kilo.
When asked why watermelon is more expensive at markets than at fields, a merchant said he has to pay VND15-20 million in transport and other costs to carry 4-5 tons of watermelon from the south to Hanoi.
Local newspapers reported that though the petrol price has dropped by VND7,000-8,000 per liter over the last year, transport fees remain unchanged by transport companies, which have ignored the ministries’ repeated requests to lower fees.
Tran Dinh Thien from the Vietnam Economics Institute, several days ago said the ratio of taxes and fees to GDP is 1.4-3 times higher than in other regional countries.
From 2007-2012, the ratio was 21.6 percent of GDP, while it was 17.3 percent in China, 15.5 percent in Thailand and Malaysia, and 12.1 percent in Indonesia.
The Spring Economic Forum held in May heard a report that Vietnamese bear the heaviest taxes and fees in the region, which was described to “bleed businesses and people dry”. Though taxes have been reduced several times, they are still unbearable for businesses
