On August 24, the People's Committee of Da Nang City responded in writing to the petition of a number of enterprises with coastal investment projects facing difficulties due to high land rental prices. Accordingly, regarding the petition for enterprises to continue paying land rent according to the land rental price framework before 2020 so that enterprises can overcome the difficult period and operate stably, the People's Committee of Da Nang City said that, based on the provisions of Decree 46/2014 of the Government, when the 5-year stabilization period of the unit price cycle expires, the Da Nang Tax Department will base on the land price in the Land Price List, the land price adjustment coefficient and the percentage of calculating the land rental price issued by the People's Committee of Da Nang City to determine the land rental price for the next stabilization cycle. Therefore, the People's Committee of Da Nang City has no basis to handle the petition of the enterprise.
The People's Committee of Da Nang City has directed the Department of Natural Resources and Environment, together with the Department of Finance, to review land prices in the area and re-determine the land price adjustment coefficient in 2023 as a basis for reporting and advising the People's Committee and the People's Council of Da Nang City.
Regarding the request of enterprises to the People's Council and People's Committee of Da Nang City to propose to the National Assembly and the Government not to adjust the increase in land rent during the period affected by the COVID-19 pandemic from 2020 to 2023. The People's Committee of Da Nang City said that in order to remove difficulties for individuals and organizations during the period affected by the COVID-19 pandemic, the city has promptly implemented support policies of the Central and local governments in accordance with regulations. Specifically, reducing 15% of land rent payable in 2020, reducing 30% of land rent payable in 2021 and 2022.
Regarding the land rent support policy of the People's Committee of Da Nang City, in order to remove difficulties for organizations and individuals renting land in the area, the People's Committee of Da Nang City has issued regulations on the percentage (%) for calculating the annual land rent price, the land rent price for underground construction, and the land rent price for land with water surface in the area. Accordingly, the percentage for calculating the land rent price is adjusted from 2% to 1%, effective from April 8, 2021.
Meanwhile, in addition to the Decrees issued by the Government, the People's Committee of Da Nang City has issued an official dispatch dated November 18, 2021 reporting to the Government and the Ministry of Finance on the request to extend the time for preparing the non-agricultural land use tax for the 2022-2026 period due to the impact of the Covid-19 pandemic.
However, on February 11, 2022, the Ministry of Finance responded in an official dispatch that: "The proposal of the People's Committee of Da Nang City to apply the collection of non-agricultural land use tax in 2022 according to the 2017-2021 cycle and postpone the deadline for establishing the non-agricultural land use tax set by one year compared to the regulations is without legal basis for resolution".
The People's Committee of Da Nang City added that the authority to issue land price lists and land price adjustment coefficients belongs to the People's Council and People's Committee of Da Nang City, therefore the People's Committee of Da Nang City has no basis to report the content of the enterprise's petition to the National Assembly and the Government.
In addition, according to businesses, currently, their revenue and profit are very low, not enough to cover operating costs, not including land rent. The business community hopes that company accounts will not be frozen, and land rent debts will not be forced due to the impact of land price increases of 300-400%.
Regarding this proposal, the People's Committee of Da Nang City said that, according to regulations, companies that owe land rent overdue for more than 90 days are subject to enforcement. Based on the actual situation, the Tax Authority will apply appropriate enforcement measures according to the provisions of Article 125 of the Law on Tax Administration No. 38/2019/QH14.
In addition, businesses also want the city to review land rental prices, because the current market land prices have decreased by 30-50% compared to the pre-pandemic period. At the same time, they recommend that the city apply land rental prices depending on each item as proposed by the Da Nang City People's Committee to the Ministry of Natural Resources and Environment.
Previously, the coastal business community of Da Nang had sent a petition to the leaders of the City Party Committee, People's Council, and People's Committee to respond to the call for help regarding the situation of excessively high land rents. Annual revenue is barely enough to pay land rent, causing businesses to be exhausted, many companies fall into a situation of owing tens of billions of dong in taxes.
Mr. Nguyen Manh Trung, Director of Sao Viet Non Nuoc Company Limited - Investor of Melia Danang Beach Resort, said that according to regulations, land rent will be adjusted every 5 years. However, the recent adjustment of high land rent shocked him.
Specifically, in the 2017-2021 cycle, his company had to pay the city more than 7 billion VND/year in land rent; but in the 2022-2026 cycle, the land rent increased to more than 27 billion VND/year.
“In the pandemic year, revenue was 1 billion VND but land rent was 7 billion VND. Last year, when we closed for half a year, revenue was 36 billion VND, land rent was 27 billion VND, accounting for 70%. The government supported businesses by reducing land rent by 30% and allowing late payment, while localities increased it by 300-400%, like drums beating one way and trumpets blowing the other way,” said Mr. Trung.
According to Mr. Trung, in order to pay the land rent, he must sell his house and assets accumulated over many years; because if he pays late, the company will be forced to pay and have its account frozen. If the city does not adjust the land rent, many businesses will continue to close and go bankrupt, and workers will lose their jobs.
"We may have to leave our land and assets behind," Mr. Trung said sadly.
Not only the investor of Melia Danang Beach Resort is in dire straits, many other businesses are also falling into a similar situation due to high land rents. For example, the land rent for 2012-2016 of a large resort in Ngu Hanh Son district was 4.7 billion VND, but the land rent for 2017-2021 increased to more than 35 billion VND and the land rent for 2022-2026 increased to nearly 121 billion VND.
In February 2023, the People's Committee of Da Nang City sent an official dispatch to the Ministry of Natural Resources and Environment proposing to determine the land rental price for the project according to the purpose of use for each item. Accordingly, the land for construction of the proposed project is calculated at the price of commercial - service land; traffic land, parking lot is calculated equivalent to 35% of non-agricultural land; land for trees, parks, water surfaces, and sandbanks is equal to the price of non-agricultural land.
Source
Comment (0)