HoREA proposes high tax on abandoned land

Recently, Mr. Le Hoang Chau – Chairman of Ho Chi Minh City Real Estate Association (HoREA) said that the unit has sent a document to the Politburo and Party Central Committee to comment on promoting resources. land for socio-economic development.

Accordingly, HoREA pointed out some inadequacies of mechanisms and policies, leading to the fact that land resources have not been fully promoted to become an important internal force for socio-economic development.

Specifically, Mr. Chau said that there are golden lands in the downtown area of ​​Ho Chi Minh City that are wasted, such as the land area of ​​several thousand square meters on Nguyen Hue Street, which has been vacant for more than 10 years and has not been put into use. business construction investment. If it does not become a commercial or service establishment, does not create jobs, and does not contribute to the city’s GRDP, the use value of this golden land is also zero.

Or there are enterprises that share large-scale projects but do not put the land into use, do not implement the project due to many reasons, even there are signs of land speculation, which leads to waste of time. land resource costs.

According to HoREA, there are “golden lands” in the downtown area, even with an area of ​​up to several tens of hectares designated as investors for private businesses, the “land rent difference” is the main reason. weak fall into the “private pocket”. This is not fully mobilized into the state budget to serve the public benefit and it is not found that 20% of the project’s residential land fund is used for social housing development in accordance with the Law on Housing.

The association evaluates the mechanism for calculating land use levy and land rent for the whole 50-year cycle, and paying it once, and especially the extremely complicated and cumbersome process of calculating land use levy. Consuming a lot of time and effort of land users, especially businesses, both give rise to the “please-give” mechanism, harassment, negativity, etc., and can lead to loss of state budget revenue, loss of income and loss of income. get rid of public property as land resources.

In order to increase the value of land use, both to serve socio-economic development, and to create a large, stable and sustainable source of revenue for the budget, according to HoREA, planning has an important role and position. It is an important period and a premise for the economy and the real estate market to develop stably and sustainably. The master plan shows both the vision of the State, the will of the State, and the interests of the State representing the national and public interests.

The reality of Ho Chi Minh City has shown that, 1 ha of agricultural land only creates a value of about 500 million VND / year, but 1 ha of industrial, commercial and urban service land creates a value of up to about 55 billion VND/year, which is more than 100 times higher.

In order to put the land into effective exploitation, HoREA proposes to levy a high tax on abandoned land and projects so that investors can’t afford it, have to turn their capital to invest or transfer to other units that have a lot of money. capacity. “It is not possible to administrativeize but should use tax tools to eliminate the will to speculate and hold land,” said HoREA.

In the long term, according to HoREA, it is necessary to change the view on land use levy, it should be considered as a tax as proposed by the People’s Committee of Ho Chi Minh City.

Specifically, it is necessary to abandon the concept of land use levy and replace it with a residential land use tax with a certain tax rate, about 10% or 15% of the land price list. Thus, it is both transparent and easy to calculate and eliminates the ask-give mechanism. At the same time, limit the large first-time land use levy and maintain a sustainable and long-term revenue source for the State.

In addition, HoREA also pointed out shortcomings in tax policies such as: Agricultural land use tax is being exempted from payment until 2025; Non-agricultural land use tax is being collected at a very low tax rate, only 0.03% or 0.15%… As for income tax from the transfer of real estate, land use rights with the tax rate of 2% on the value of the transfer contract is in the form of “flattening”, contrary to the principle of income tax, which is only collected when there is income… The association wishes that these shortcomings need to be corrected soon.