Why aren't businesses in the Tra Noc Industrial Park receiving a reduction in land rent?

Businesses in the Tra Noc Industrial Zone, Can Tho City, are not eligible for land rent reductions - Photo: LE DAN

On August 20th, a leader of the Can Tho City Tax Department stated that they had submitted a report to the City People's Committee regarding guidance on considering and resolving the request from the Can Tho City Business Association for a reduction in land rent for 2023.

Accordingly, in accordance with the provisions of Decision No. 25 of 2023 of the Prime Minister on reducing land rent for 2023, the Can Tho City Tax Department will only consider reducing land rent for cases where the State is directly leasing land in accordance with the law on land in the form of annual land rent payments.

Individuals and entities that sublease land within industrial zones are not directly leased land by the State according to land law regulations, and therefore do not fall under the jurisdiction of the City Tax Department.

The Can Tho City Tax Department has also approved a reduction in land rent for 2023 for Can Tho Industrial Park Infrastructure Construction Joint Stock Company (CIPCO). The consideration of land rent reductions for individuals and entities that have signed land lease contracts with CIPCO falls under CIPCO's authority and responsibility.

However, according to the Can Tho City Business Association, in January 2024, CIPCO sent a letter responding to the reduction of land rent as per the Prime Minister 's decision.

Accordingly, CIPCO cannot apply the land lease fee reduction policy for 2021, 2022, and 2023 as decided by the Prime Minister to the land sublease contracts already signed between CIPCO and the sub-leasing enterprises in Tra Noc 1 and Tra Noc 2 Industrial Parks.

A leader of the Can Tho City Business Association stated that the fact that businesses leasing land in industrial zones do not receive a 30% reduction in land rent is a significant disadvantage for these businesses.

Because CIPCO is the primary land lessee, the businesses in the industrial park are the secondary land lessees, directly putting the land into production and business operations.

While CIPCO still receives a 30% reduction in land rent, the businesses subleasing the land do not benefit from the same policy, whereas CIPCO should have reduced the rent by a similar amount for these sub-lessees.

Can Tho Industrial Park Infrastructure Construction Joint Stock Company is the investor of Tra Noc 1 and Tra Noc 2 Industrial Parks - Photo: LE DAN

Businesses that sublease land are not eligible for rent reductions.

Speaking to Tuoi Tre Online , Mr. Truong Van Tien, head of the planning and business development department of CIPCO, said that after the Prime Minister issued the decision to reduce land rent, CIPCO immediately sent a document to the relevant authorities of Can Tho city requesting guidance on procedures to apply the State's policy to reduce land rent for businesses in Tra Noc 1 and Tra Noc 2 Industrial Parks.

However, according to the guidance document from the Ministry of Finance, CIPCO's subleasing of land within the industrial park to businesses is based on a civil agreement between the parties. Businesses subleasing land within the industrial park are not eligible for land rent reductions as per the Prime Minister's decision.

Therefore, CIPCO cannot reduce land rent for businesses in Tra Noc 1 and Tra Noc 2 Industrial Parks.

"In 2023, the Can Tho City Tax Department reduced land lease fees for CIPCO by 30%, amounting to 1.9 billion VND. If divided among the 200 businesses operating in Tra Noc 1 and Tra Noc 2 Industrial Parks, this figure is too small," Mr. Tien said.

Source: https://tuoitre.vn/vi-sao-doanh-nghiep-tai-khu-cong-nghiep-tra-noc-khong-duoc-giam-tien-thue-dat-20240820164519665.htm