Pending the new instruction, the old registration fee of 10 percent will remain in effect.

The new fee means that Hanoi will have the highest auto registration fee in the nation. But it is still lower than the 15 percent level proposed by the Ministry of Finance (MoF) for Hanoi and HCM City.

Last December, the Vietnam Automobile Manufacturers Association petitioned to have the new fee postponed to promote domestic auto sales.

The Hanoi City People’s Committee rejected it, arguing that this move is a measure to ease traffic congestion on the capital’s overcrowded roads.

According to MoF statistics, registration fees from 2001 to 2006 were among the most important revenue sources after petrol fees, providing 1.57 percent of the total State income. Total State budget income from fees and charges in 2008 reached about VND 3 trillion (US$182 million).