Sand capital but sky-high prices, how can Quang Ngai reduce it?

Sand capital but sky-high prices

Quang Ngai is considered the sand capital of Vietnam, with reserves of up to hundreds of millions of cubic meters, widely distributed in most major rivers in the area, with hundreds of planned mining points.

Quang Ngai has sand reserves of up to hundreds of millions of cubic meters, but for many years the price of construction sand has remained too high.

At the same time, the quality and method of sand mining in Quang Ngai are also highly appreciated, very convenient and have lower costs than many localities in the country.

However, for many years, sand prices have remained very high compared to the general level in neighboring localities. The high price of sand sold at the mine has pushed the construction market into difficulty, many contractors are "distorted" because the actual cost of buying sand is much higher than the estimated price for payment by the investor.

Specifically, the price of construction sand in Quang Ngai at present is quite high at around 450 thousand VND/m3. In some places, it is even over 500 thousand VND/m3, which has greatly affected the construction of houses for people and infrastructure projects using public investment capital.

It is known that in addition to the group of sand mines serving the construction of the Quang Ngai - Hoai Nhon expressway, in Quang Ngai province there are about 10 sand mines that have been licensed for exploitation and are preparing for exploitation with a reserve of nearly 1.8 million m3, and an annual exploitation capacity of about 400,000 m3.

It is noted that the selling price of sand at mines registered with competent authorities ranges from 300,000 - 350,000 VND/m3. For example, at Dong Xuan 2 sand mine, Hanh Thien commune, Nghia Hanh district, the selling price at the mine including VAT is 325,000 VND/m3.

To reduce sand prices, the Department of Construction of this province proposed to reduce sand prices to 150,000 VND/m3 to calculate tax.

For An Trang mine, Nghia Thang commune, Tu Nghia district, the selling price at the mine (excluding tax) is 318,000 VND/m3.

Particularly at Tinh An - Nghia Dung mine, Quang Ngai City (currently the largest in the province, owner is Quang Ngai Mineral Development Investment Joint Stock Company), the price of sand sold at the mine before tax is 323,000 VND/m3; after tax is 356,000 VND/m3.

Proposal to bring sand price down to 150 thousand VND/m3 for tax calculation

Due to the heat of the sand market and especially the way the tax is calculated which is considered too high, the cost of each cubic meter of sand sold on the market is always in a state of exceeding the threshold, making it difficult for construction contractors and people to buy sand. There was even a time when there was a shortage of sand.

To solve the above problem, recently, the Department of Construction of Quang Ngai sent an official dispatch to the Department of Finance regarding the price list for calculating natural resource tax in 2024 in the area.

Notably, the price for calculating resource tax on yellow sand used in construction issued by the People's Committee of Quang Ngai province, effective from the beginning of 2024, is 230,000 VND/m3. If only calculating resource tax, it will increase by 12,000 VND/m3 compared to before.

Quang Ngai Department of Construction believes that calculating the tax on yellow sand is unreasonable and is one of the reasons for the high price of sand. Therefore, this department proposed that the Department of Finance advise the Quang Ngai Provincial People's Committee to reduce the sand price from VND230,000/m3 to VND150,000/m3 for tax calculation.

Construction businesses say that the actual sand price, the declared sand price of the mine and the selling price on the market are still inconsistent, leading to difficulties for contractors.

According to Deputy Director of Quang Ngai Department of Construction Nguyen Huu Hong, the proposal to bring the sand price down to 150,000 VND/m3 to calculate tax is necessary because this is the threshold within the average allowable range and similar to provinces in the Central region to stabilize the construction sand market.

Mr. Hong said that the current tax price is 230 thousand VND/m3, this price constitutes a direct participation in the formula for calculating the auction price for mineral exploitation rights. From there, it has caused an increase in the auction price for mineral exploitation rights at some enterprises that won the sand mine auction before, causing the cost of each cubic meter of sand before being sold to the market to increase. Since then, many enterprises that won the sand mine auction have competed to pay the mine because the tax difference is too large compared to 2023.

Citing this, Mr. Hong said that the method of calculating tax on construction yellow sand according to the calculation formula of the joint ministries of the Ministry of Natural Resources and Environment and Finance must be based on the direct reference price in the formula for calculating the winning price of the mineral exploitation rights auction, which is the local tax calculation price list.

Thus, if the price list of yellow sand for tax calculation in 2023 is only 150 thousand VND, the winning enterprise will pay the mining right fee at a relatively high level to create a moderate selling price of less than 300 thousand VND/m3. Meanwhile, with the same formula above, the reference price is 230 thousand VND (an increase of 80 thousand VND/m3), but the mining right fee is doubled.

This led to the situation where the winning bidder returned the mine. As a result, the task of bringing this material to market was not achieved, the supply was scarce so the price increased again.

"For example, at Tinh Ha sand mine, the winning enterprise in the 2023 auction paid approximately 20 billion VND (the price for calculating resource tax applied in 2023). However, through the enterprise's calculation to calculate the mining right fee, the amount payable increased to about 40 billion VND (the tax price applied in 2024 is 230 thousand VND/m3), double the amount applied to the tax price in 2023.

With that amount of money, to exploit sand, businesses have to raise the selling price to around 500 thousand VND/m3, or even more.

Reducing sand prices is a necessary requirement to stabilize the construction market in Quang Ngai.

"It is clear that the current tax calculation method is too high, greatly affecting the price of each cubic meter of sand on the market. To reduce the price of sand, it is necessary to change the way of calculating tax collection to bring the sand price back to reality," said Mr. Hong.

It is known that previously, the People's Committee of Quang Ngai province issued Decision 53, promulgating the price for calculating resource tax, including yellow sand, in 2023 in the province. However, after 10 months of application, the construction sand market in this province has "leaped".

Faced with the above situation, Quang Ngai province has directed specialized agencies to review and advise on solutions to reduce sand prices.

Source: https://www.baogiaothong.vn/thu-phu-cat-nhung-gia-cao-tren-troi-quang-ngai-keo-giam-cach-nao-192241009140905361.htm