(CLO) Currently, localities calculate land rental prices differently, in some cases, two neighboring localities have a difference of 30% - 40%. Some localities like Binh Duong calculate reasonable prices, but there are also localities, even though they are purely agricultural provinces, that calculate very high rental prices.
What benefits do businesses get from the proposed 30% reduction in land rent?
Recently, in early January 2025, the Ministry of Finance proposed a 30% reduction in land rent payable in 2025, similar to the land rent reduction policy for 2021, 2022, 2023 and 2024.
According to experts, this policy is in line with the Government's determination to achieve an economic growth rate of 8% in 2025, aiming to create momentum for double-digit growth in the 2026-2030 period.
Currently, localities calculate land rental prices differently. (Illustration photo)
The Vietnam Federation of Commerce and Industry (VCCI) believes that the land rent reduction policy will help businesses reduce financial burdens, enhance their ability to respond to global economic risks, thereby contributing significantly to realizing the 8% growth target in 2025.
With the proposal to reduce land tax by 30% in 2025, VCCI believes that the policy of reducing land rent in the years from 2021 to 2024 has brought positive impacts to the economy. The land rent reduction in previous years was 30% and is considered reasonable.
“This reduction helps businesses have more resources to restore production and business but is still controlled within the permitted limits, ensuring no significant impact on total state budget revenue,” said VCCI.
Meanwhile, many experts say that from 2024 to 2025, businesses will still face difficulties due to being greatly affected by fluctuations in the domestic and global financial and economic crisis.
To maintain existence and accumulate finance for long-term investment plans, creating momentum and resilience for business growth in the coming period, reducing 30% of annual land rent payable by businesses is very necessary and timely.
However, Mr. Nguyen Anh Tung, Director of G24 Real Estate Company, said that it is necessary to choose the right subjects to ensure social fairness and that businesses, no matter how small, will benefit. This is very important, because the support policy is for difficult cases. The leveling situation, sometimes not only causes dissatisfaction but also damages the country's financial resources.
Speaking to reporters of the Journalist and Public Opinion Newspaper, Mr. Pham Duc Toan, CEO of EZ Real Estate Investment and Development Joint Stock Company (EZ Property), agreed with the proposal of the Ministry of Finance regarding a 30% reduction in land rent payable in 2025.
Mr. Toan said that currently, many businesses, including the "big guys" in the real estate sector, are facing many difficulties when paying land use fees. Because, recently, many localities have adjusted the new land price list, with a relatively high increase. In particular, some localities have adjusted the land price list to increase by up to 300%, this factor has pushed up the land rental price.
“When land rents increase, it disrupts all plans for cash flow, revenue, and profits of businesses. Therefore, the proposal of the Ministry of Finance is reasonable in some localities with moderate adjustments. For localities that have just adjusted the new land price list with a 300% increase, this reduction is nothing,” said Mr. Toan.
The land rent reduction policy will help businesses reduce their financial burden. (Photo: ST)
In addition, Mr. Pham Duc Toan said that currently, localities calculate land rental prices differently, in some cases, two localities are next to each other, but the calculation method differs by 30% - 40%. There are localities like Binh Duong that calculate reasonable prices, but there are also localities that, although purely agricultural, charge very high rental prices.
“Calculating land rental prices is the responsibility of localities, but the situation where each province calculates a different price will have a huge impact on businesses operating in many localities,” said Mr. Toan.
In that context, to make the policy suitable to reality, Mr. Toan said that the Ministry of Finance needs to have standards and specific instructions on the method of calculating land rental prices to synchronize with the whole country. From there, it will help to unify the calculation of land prices.
Maintaining the policy of reducing land rent for many years does not affect the budget revenue stream.
In fact, during the 2020-2024 period, Vietnam has maintained a policy of reducing land rent by 30% and exempting, reducing, and extending a number of other taxes and fees, to support the economy in recovering from "shocks" related to the pandemic and natural disasters.
It can be seen that reducing land rent and other fiscal policies means that budget revenue will be reduced, however, according to many experts, this policy is necessary to support the business community to recover, thereby stimulating economic growth.
According to the General Department of Taxation, the amount of land and water surface rent reduced in 2020 is 2,890 billion VND. In 2021, 2022, 2023, the average is 3,734 billion VND/year.
The General Department of Taxation believes that these policies have contributed to supporting businesses, organizations, units, households and individuals in overcoming difficulties caused by the impact of the Covid-19 epidemic so that they can soon restore production and business activities.
In 2024, land rent is expected to decrease by about VND 4,000 billion, equivalent to 0.26% of total state budget revenue per year and 9% of state budget revenue from land rent per year.
Regarding this issue, the Ministry of Finance believes that the reduction in land rent under this policy will not significantly affect the overall state budget revenue, but will have a major impact on the recovery and development of production and business of organizations, individuals, households, and enterprises, thereby increasing state budget revenue from taxes to compensate for the reduction in revenue due to the reduction in land rent.
Source: https://www.congluan.vn/doanh-nghiep-co-thuc-su-duoc-huong-loi-tu-viec-de-xuat-giam-30-tien-thue-dat-post333361.html
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