Owner of Doi Cu Golf Course shocked by 1,207% increase in land rental price

SGGP 04/08/2023 06:15

Hoang Gia DL Company, owner of the Doi Cu golf course project ( Lam Dong province), has just been informed that the expected land rental price will suddenly increase by 1,207%. If this price is applied, the company will likely go bankrupt, because the actual revenue is not enough to pay the land rental fee.

Even selling the golf course does not have money to pay. It is known that the highest revenue of Doi Cu golf course was in 2019, with 29 billion VND.

On August 11, 2022, Lam Dong Tax Department announced that the land rental price at Doi Cu Golf Course for the 2022-2027 period of Hoang Gia DL Company is more than 176 billion VND/year. Of which, the rental price of 3,212m² of commercial - service land is more than 1.2 billion VND/year and nearly 325,000m² of sports land is 175 billion VND/year.

In a petition sent to the Lam Dong Provincial People's Committee, the Department of Natural Resources and Environment, the Department of Finance and the Lam Dong Tax Department, Mr. Nguyen Hoang Vu, General Director of Hoang Gia DL Company, said that the expected annual land rental amount being many times higher than the revenue is inappropriate.

This greatly affects production and business activities, even making it impossible to pay into the state budget, with many risks leading to business bankruptcy, loss of payment ability, and unbalanced input capacity, while annual land rental costs are too high.

Citing evidence, during the exploitation of the 18-hole Doi Cu golf course, the company fulfilled its land rental obligations in the 2007-2011 cycle with the amount payable of VND 2.1 billion/year; the 2012-1016 cycle with the amount payable of VND 9.1 billion, an increase of 415% compared to the 2007-2011 cycle; the 2017-2021 cycle with the amount of VND 14.6 billion/year, an increase of 160% compared to the 2012-2016 cycle. In the 2022-2027 cycle, Lam Dong Tax Department plans to apply the land rental unit price with the total land rental payable of VND 176.3 billion/year, an increase of 1,027% compared to the 2017-2022 cycle.

Hoang Gia DL Company believes that the legal basis for Lam Dong Tax Department to determine the land rental price is Clause 1, Article 14, Decree 46/2014/ND-CP dated May 15, 2015 of the Government , regulating the collection of land and water surface rental fees. However, this Decree has been amended and supplemented by Decree 135/2016/ND-CP effective from November 15, 2016.

In Clause 4, Article 3, Decree 135 amended and supplemented Clause 7, and added Clause 8 to Article 15 of Decree 46. Accordingly, it can be understood that from the cycles of 2006-2011, 2011-2016, 2017-2021, 2022-2027, only an increase of 15% compared to the land rental price of the previous stable period can be made and applied to the remaining land rental period of the project (until 2041).

Therefore, this enterprise recommends that the People's Committee of Lam Dong province consider and direct relevant agencies to apply regulations and select methods to determine land prices appropriate to the actual situation for land lease not only at Doi Cu golf course but also other land areas that the enterprise is leasing: Dalat Palace hotel, Duparc Dalat hotel, and 2 villas at 27A and 27B Tran Hung Dao street.

Regarding the proposal of Hoang Gia DL Company, Lam Dong Provincial People's Committee has issued a document assigning the Department of Finance to urgently contact and work with the specialized agency of the Ministry of Natural Resources and Environment, requesting early research and guidance on the application of golf course land to determine the rental price for enterprises. From there, coordinate with relevant departments and branches to consider and resolve or advise the Provincial People's Committee to consider and resolve the proposal of Hoang Gia DL Company before April 30.

At the meeting to discuss solutions for state budget collection in 2023 and to resolve difficulties and problems in determining land prices for land rent collection, land allocation, and land use rights auctions in Lam Dong province held on April 6, Mr. Tran Phuong, Director of Lam Dong Tax Department, acknowledged that the application of land rental prices to Hoang Gia DL Company was inappropriate. There has been a provisional price announcement, but the enterprise has made recommendations to resolve the issue.

Many opinions at the meeting also said that many businesses operating in the province are also stuck with too high land rental prices. Through reports from departments, branches and sectors, Mr. Tran Van Hiep, Chairman of Lam Dong Provincial People's Committee, requested the Department of Finance, Tax Department, Department of Natural Resources and Environment of the province and related agencies to review and refer to legal regulations, consult localities, as well as the actual investment and business situation of businesses to find solutions.

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