On October 11, Mr. Ho Ky Minh, Permanent Vice Chairman of the People's Committee of Da Nang City, and related departments inspected two coastal land projects in response to businesses' petitions about excessively high land rents.
At the Ariyana Da Nang project of Thien Thai Hotel and Tourism Joint Stock Company - Vo Nguyen Giap Street, Ngu Hanh Son District - Mr. Le Minh Kha, Deputy General Director of the company, said that the area of the project that must pay annual land rent is about 22 hectares. The land rent unit price is calculated according to the Vo Nguyen Giap road coefficient, the project currently has to pay more than 120 billion/year, an increase of more than 30 billion compared to 2018 and 2019.
Mr. Ho Ky Minh (left) during the site inspection on October 11 at the Ariyana Da Nang project
According to Mr. Kha, land rent is currently a burden for the project. While the main cash flow is generated from apartments, villas, and the conference center, it is not enough to pay the land rent. Specifically, in 2019, the revenue of the conference center was about 1.8 million USD (equivalent to 40 billion VND), and in 2023, about 1 million USD. Meanwhile, the cost of building the conference center is 450 billion VND. If we only calculate the area of the conference center with about 2 hectares, the land rent each year is about 10 billion VND.
Mr. Kha also said that when working with the Ministry of Natural Resources and Environment, the company learned that some projects in Hanoi have unit prices based on land use functions. The land for construction is calculated separately from the land for landscape, trees, and traffic. The locality is completely allowed to decide the unit prices.
In addition, Mr. Kha said that the current reality in the coastal strip of Da Nang has shortcomings. Specifically, the right side of Vo Nguyen Giap Street is mostly residential land, so applying a high price is reasonable. The left side is mainly projects with large land plots, low density of use, so it is recommended to issue separate unit prices.
At the Melia Da Nang Resort project - Ngu Hanh Son district, Mr. Nguyen Manh Trung, General Director of Sao Viet Non Nuoc Company Limited - the project investor, said that the current land rent is based on the 2019 land price list. While businesses are affected by the epidemic, the economy is in decline, so there is no revenue. Currently, Melia Da Nang Resort has to pay 28 billion VND per year. Meanwhile, the land used for construction has been paid once, the remaining areas for landscape functions, trees, etc. must be rented at 70% of the commercial service land price. Mr. Trung said that this is unreasonable.
Mr. Nguyen Manh Trung (right) talks about the difficulties that businesses are currently facing due to high land rents.
"Da Nang City charges too high land prices and businesses have petitioned for many years but have not received any response," Mr. Trung emphasized, saying that the authority to change belongs to the city. According to Mr. Trung, the city must re-evaluate land prices to save businesses. "Don't let this entire stretch of coastline become deserted. Businesses have been milked dry," Mr. Trung complained.
According to Mr. Trung, if Da Nang City does not change the land price list, coastal businesses will likely "die young".
Receiving the opinions of enterprises, Mr. Ho Ky Minh suggested that the Department of Natural Resources and Environment consider and advise the City People's Committee. Mr. Minh also said that the City People's Committee has reported to the City Party Committee and the City People's Council. Any issues under the authority of the Central Government will soon have recommendations for adjustment.
Previously, a number of coastal enterprises sent petitions to the City Party Committee, People's Council, and People's Committee of Da Nang City, complaining about the excessively high land rents. These enterprises mostly operate in the tourism sector in coastal areas of Son Tra and Ngu Hanh Son districts. Land rents increased by 300%-400% compared to the previous cycle while revenue was low, causing many enterprises to owe tens of billions of VND in taxes.
Source: https://nld.com.vn/kinh-te/lanh-dao-da-nang-kiem-tra-du-an-ven-bien-sau-kien-nghi-tien-thue-dat-qua-cao-20231011130944352.htm
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