VNRE - The enforcement of the Government Decree No. 121/2011/ND-CP on amendments and supplements to some articles in the Decree No. 142 on the collection of land and water surface rents is causing more difficulties for businesses which are also being troubled by economic problems, high interest rates and manufacturing downscale.
At a recent workshop entitled "Solving land leasing problems for businesses and tax-related issues" held in Hanoi by the Vietnam Chamber of Commerce and Industry (VCCI), the Ministry of Finance, the Administrative Procedure Control Agency (APCA) under the Government Office, the Ministry of Natural Resources and Environment, and the Vietnam Business Forum Newspaper, many delegates complained about higher land rent in 2011 over 2010 and gave voice to regulations on land rent rates applied to businesses at tax offices.
According to this decree, land rent rates are determined on market prices of land-use rights transfer in an ordinary business condition instead of being fixed annually by the provincial or municipal People’s Committees. Currently, the percentage of land rent rates has been revised up from 0.5 percent to 1.5 percent of the total rent value, or a three-fold increase, while land rent rates also climbed from 1.5 to 5 folds from the previous rates, depending on locality and type of land.
A representative from the Economics and Land Development Department under the Ministry of Natural Resources and Environment said the ongoing reality showed that costs for land clearance are very high; market price-based compensations for non-farming land are also relatively high, and if rent rates are not hike to 1.5 - 2 percent, the State Budget will have “nothing to collect.” Moreover, Vietnam has eight or nine first-grade urban zones where land prices are extremely high and rising strongly.
Director of Hai Phong City-based Hong An Equipment Company said his company was shocked at the rent notice dispatched by the Hong Bang District Tax Office as the amount of rents soared to VND412 million in 2011, 18.5 times higher than in 2010. Not only Hong An Equipment Company, many other companies were also upset by new rent notices in 2011. For instance, Hai Phong Auto Company will have to pay VND3,185 million in 2011, a five-time fold increase from VND626 million in 2010; and the Construction Joint Stock Company No. 9 saw a more than 10-time increase in rent pay from VND55 million in 2010 to VND555 million in 2011.
A representative from Ha Long Small and Medium-sized Enterprise Association, Quang Ninh province said land rent rates in 2011 were 1.5 - 5 times higher than in 2006; and the rent rate was also raised from 0.5 percent to 1.5 percent, or a 3-fold rise over 2006. It is extremely irrational when land rent expenses jumped 4.5 - 15 times within just five years.
Therefore, most businesses agreed that the Decree 121 needs a proper enforcement roadmap and schedule. The change in rent rates must be based on specific conditions of each business and a sudden big change is unacceptable.
“The adjustment to land rent must be practicable. A careful study in the applicable time is essential to ensure harmonious benefits of businesses and the government and suit economic conditions of each locality,” said chairman of Ha Long Small and Medium-sized Enterprise Association.
Attending companies requested the government to reconsider land rent rates and allow a delay in land tax payment in 2011 to 2012 and subsequent years.
After hearing and recording opinions from businesses, Deputy Finance Minister Do Hoang Anh Tuan said the Finance Ministry and the VCCI will send their requests to competent ministries and government agencies to find best solutions to support companies to deal with new difficulties. He admitted that the time for enforcing the Decree 121 is not convenient and its contents are not sufficient. Therefore, companies can put forth proper rates of land rents for 2011 to cope with existing difficulties.
Reported by Trinh Hai | VCCI News
At a recent workshop entitled "Solving land leasing problems for businesses and tax-related issues" held in Hanoi by the Vietnam Chamber of Commerce and Industry (VCCI), the Ministry of Finance, the Administrative Procedure Control Agency (APCA) under the Government Office, the Ministry of Natural Resources and Environment, and the Vietnam Business Forum Newspaper, many delegates complained about higher land rent in 2011 over 2010 and gave voice to regulations on land rent rates applied to businesses at tax offices.According to this decree, land rent rates are determined on market prices of land-use rights transfer in an ordinary business condition instead of being fixed annually by the provincial or municipal People’s Committees. Currently, the percentage of land rent rates has been revised up from 0.5 percent to 1.5 percent of the total rent value, or a three-fold increase, while land rent rates also climbed from 1.5 to 5 folds from the previous rates, depending on locality and type of land.
A representative from the Economics and Land Development Department under the Ministry of Natural Resources and Environment said the ongoing reality showed that costs for land clearance are very high; market price-based compensations for non-farming land are also relatively high, and if rent rates are not hike to 1.5 - 2 percent, the State Budget will have “nothing to collect.” Moreover, Vietnam has eight or nine first-grade urban zones where land prices are extremely high and rising strongly.
Director of Hai Phong City-based Hong An Equipment Company said his company was shocked at the rent notice dispatched by the Hong Bang District Tax Office as the amount of rents soared to VND412 million in 2011, 18.5 times higher than in 2010. Not only Hong An Equipment Company, many other companies were also upset by new rent notices in 2011. For instance, Hai Phong Auto Company will have to pay VND3,185 million in 2011, a five-time fold increase from VND626 million in 2010; and the Construction Joint Stock Company No. 9 saw a more than 10-time increase in rent pay from VND55 million in 2010 to VND555 million in 2011.
A representative from Ha Long Small and Medium-sized Enterprise Association, Quang Ninh province said land rent rates in 2011 were 1.5 - 5 times higher than in 2006; and the rent rate was also raised from 0.5 percent to 1.5 percent, or a 3-fold rise over 2006. It is extremely irrational when land rent expenses jumped 4.5 - 15 times within just five years.
Therefore, most businesses agreed that the Decree 121 needs a proper enforcement roadmap and schedule. The change in rent rates must be based on specific conditions of each business and a sudden big change is unacceptable.
“The adjustment to land rent must be practicable. A careful study in the applicable time is essential to ensure harmonious benefits of businesses and the government and suit economic conditions of each locality,” said chairman of Ha Long Small and Medium-sized Enterprise Association.
Attending companies requested the government to reconsider land rent rates and allow a delay in land tax payment in 2011 to 2012 and subsequent years.
After hearing and recording opinions from businesses, Deputy Finance Minister Do Hoang Anh Tuan said the Finance Ministry and the VCCI will send their requests to competent ministries and government agencies to find best solutions to support companies to deal with new difficulties. He admitted that the time for enforcing the Decree 121 is not convenient and its contents are not sufficient. Therefore, companies can put forth proper rates of land rents for 2011 to cope with existing difficulties.
Reported by Trinh Hai | VCCI News
Post a Comment
Post a Comment