Businesses hope to soon access land rent support

In order to support businesses in overcoming difficulties, the Government has continuously issued decisions on reducing land and water surface rents since 2020. However, many businesses located in industrial parks (IPs) in the city have not yet been able to access this support, despite being in need of policy support.

Businesses hope to soon access the land lease support policy issued by the Government. In the photo: Production activities at Daiwa Vietnam Co., Ltd. (Hoa Khanh Industrial Park, Lien Chieu District). Photo: MINH LE

Businesses hope to soon access the land lease support policy issued by the Government. IN PHOTO: Production activities at Daiwa Vietnam Co., Ltd. (Hoa Khanh Industrial Park, Lien Chieu District). Photo: MINH LE

Recently, the Government has successively issued Decision No. 22/2020/QD-TTg dated August 10, 2020, Decision No. 27/2021/QD-TTg dated September 25, 2021 on reducing land rents for 2020 and 2021 for subjects affected by Covid-19; Decision No. 01/2023/QD-TTg dated January 31, 2023 on reducing land rents and water surface rents for 2022 for subjects affected by Covid-19; Decision No. 25/2023/QD-TTg dated October 3, 2023 on reducing land rents for 2023.

Beneficiaries of the decisions are organizations, units, enterprises, households and individuals who are directly leasing land from the State according to decisions or contracts or certificates of land use rights, house ownership rights and other assets attached to land issued by competent State agencies in the form of annual land rental payments. In particular, land rental support in 2020 only applies to enterprises and units that have to stop production and business for 15 days or more due to the impact of Covid-19 with a 15% reduction. In 2021-2023, organizations and individuals subject to the regulations will be supported with 30% of land rental.

The above decisions are considered important support for businesses when many businesses benefit from the tax and fee support in 2020 of 23.4 billion VND; in 2021, 115.1 billion VND and in 2022, 150 billion VND. However, according to regulations, businesses that lease land from State representative units are not supported. Specifically, 159 businesses lease land in two industrial parks, Hoa Khanh (Lien Chieu district) and Da Nang Seafood Service Industrial Park (Son Tra district), with Da Nang Industrial Park Infrastructure Development and Exploitation Company, a public service unit assigned by the city as the investor.

Mr. Nguyen Thanh Phuoc, Director of Ba Loc Abrasive Adhesive Manufacturing Co., Ltd. (Hoa Khanh Industrial Park) informed that from 2020 to now, the company has only received support for a 50% reduction in infrastructure usage fees in 2021 with an amount of VND 19.39 million according to Decision No. 1010/QD-UBND dated April 15, 2022 of the City People's Committee on approving support for infrastructure fee reduction in 2021 for enterprises in Hoa Khanh Industrial Park and Da Nang Seafood Service Industrial Park.

Mr. Phuoc analyzed that each year, the company has to pay more than 156.5 million VND for land re-rent and infrastructure use, of which, land re-rent accounts for 111.5 million VND and infrastructure use costs 45 million VND. If the company is supported with 30% of the land rent, it will be more practical for the business. Similarly, Ms. Vu Thi Thu Hong, Director of Bac Trung Nam Seafood Joint Stock Company (Da Nang Seafood Service Industrial Park) said that the company only received 50% support for infrastructure use in 2021 with the amount of 34.66 million VND for ^8,665m2 of usable area, and has not yet accessed land rent support.

Through research, manufacturing enterprises in the industrial park will pay two fees: land rental and infrastructure usage. Accordingly, the land rental fee arising in 2023 according to the unit price prescribed in Decision No. 272/QD-UBND dated January 14, 2016 of the City People's Committee regulating land rental prices and infrastructure usage in industrial parks invested by the city and Decision No. 7517/QD-UBND dated October 31, 2016 of the City People's Committee is 23,000 VND/ ^m2 /year, if the project has a business purpose, it will be 29,900 VND/ ^m2 /year. Infrastructure usage fee depends on the regulations of each industrial park investor, except for Hoa Khanh Industrial Park and Da Nang Aquatic Service Industrial Park, the price is 8,445 VND/ ^m2 /year and 9,116 VND/ ^m2 /year, respectively. It can be seen that businesses are looking forward to accessing 30% land rental support because the cost of land rental is about 3 times higher than the cost of infrastructure use.

According to the City Tax Department, two industrial park investors in the city have received land rent support in the past, namely Da Nang Industrial Park Infrastructure Development and Exploitation Company and Saigon - Da Nang Investment Joint Stock Company (investor of Hoa Khanh Industrial Park expansion). Accordingly, in 2021 and 2022, Da Nang Industrial Park Infrastructure Development and Exploitation Company will receive a reduction of about VND 6.06 billion and Saigon - Da Nang Investment Joint Stock Company will receive a reduction of VND 722.5 million in land rent. In 2022 alone, Saigon - Da Nang Investment Joint Stock Company will not receive a reduction in land rent because it has deducted compensation for site clearance. A representative of the Tax Department explained that according to regulations, only enterprises directly leased land by the Management Board of Da Nang High-Tech Park and Industrial Parks are eligible for land rent reduction; while enterprises signing contracts with industrial park investors are not eligible for a reduction.

At the recent regular meeting of the City People's Council in March, many opinions said that supporting enterprises to lease land in industrial parks invested by the Da Nang Industrial Park Infrastructure Development and Exploitation Company is very necessary, ensuring compliance with the spirit of Decision No. 25/2023/QDTTg. Regarding this issue, the Standing Committee of the People's Council agreed to support enterprises according to the decision and requested the City People's Committee to direct departments, branches and sectors to promptly complete the necessary procedures to report to the Standing Committee of the City People's Council. Mr. Tran Van Ty, Deputy Head of the Management Board of Da Nang High-Tech Park and Industrial Parks, said that the board has consulted and reported to the City People's Committee to promptly remove difficulties and support enterprises to access policies.

MINH LE

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