Two land rent reduction plans proposed to support businesses

DNHN - The Ministry of Finance has recently submitted a draft decree to the Government proposing a reduction in land rent for 2024, aiming to stimulate production and business activities. The two proposed plans suggest a reduction of either 15% or 30%.

According to the Ministry of Finance, the reduction in land rent aims to support organizations, units, businesses, households, and individuals currently leasing land from the State. This move is expected not only to improve the financial condition of these entities but also to motivate them to continue their production and business activities, thereby contributing to the overall economic recovery. The regulation applies to all cases of land leases authorized by governmental decisions, contracts, or land use rights certificates issued by a competent state agency.

Notably, the Ministry of Finance emphasized that the reduction in land rent will not apply to overdue debts from previous years or late payment penalties (if any). This ensures that the interest rate reduction does not adversely affect the state budget while encouraging enterprises to fulfill their financial obligations on time.

The current economic situation remains challenging despite signs of recovery. Many industries have not fully recovered from the adverse effects of the COVID-19 pandemic and other environmental factors. The GDP for the first quarter of 2024 recorded a 5.66% increase compared to the same period last year, but it remains below expectations as businesses continue to struggle with numerous challenges.

According to the Ministry of Planning and Investment, GDP growth is expected to decelerate in the latter quarters of the year. Specifically, the third and fourth quarters of 2024 may see declines of 0.35% and 0.22%, respectively. This could negatively impact state budget revenues, necessitating timely support measures.

The Ministry of Finance has proposed two specific plans for reducing land rent in 2024. The first plan suggests a 15% reduction, equivalent to approximately VND 2 trillion, while the second plan proposes a 30% reduction, equivalent to around VND 4 trillion. This differentiation allows regulatory authorities the flexibility to choose the reduction level that best fits the specific conditions of each locality and industry.

This reduction will be applied to the total land rent payable in 2024, without impacting any debts from previous years. This approach not only enhances financial management transparency but also ensures that those who genuinely need support will benefit.

To qualify for the land rent reduction, lessees must submit an application dossier as specified in the draft decree. This dossier should include the land lease decision, land lease contract, or land use rights and other attached property certificates. Lessees must also commit to the truthfulness and accuracy of the information provided.

Upon receiving a complete and valid dossier, the competent authority will have up to 30 days to determine the reduced land rent amount and issue the reduction decision. This ensures a swift and efficient process, enabling businesses to receive the necessary support in a timely manner.

The anticipated land rent reduction is expected to account for approximately 0.13-0.26% of the total annual state budget revenue. Despite this reduction, the Ministry of Finance believes that providing support to businesses will enhance their resilience and economic growth, thus compensating for the budgetary shortfall caused by this policy.

In the context of the state budget already approved by the National Assembly for 2024, the Ministry of Finance is confident that, coupled with the Government's fiscal and monetary policies, and the concerted efforts of the entire political system, the budget revenue targets will be met and exceeded, ensuring stable and sustainable development.

Previously, the Ministry of Finance had implemented several policies to reduce land rent to support businesses and households during the difficult times caused by the COVID-19 pandemic. Statistics show that from 2020 to 2023, the average annual land rent reduction was VND 2.89 trillion. Specifically, during the 2021-2023 period, this figure reached VND 3.734 trillion annually.

These policies have significantly contributed to helping businesses restore their production and business activities. Consequently, many households and individuals have overcome difficulties, maintained employment, and stabilized their lives.

The Ministry of Finance's proposal to reduce land rent in 2024 is a necessary step to support organizations and businesses amid ongoing economic challenges. The two proposed reduction plans of 15% and 30% offer opportunities for many businesses to overcome difficulties, thereby contributing to the overall economic development.

This policy not only helps businesses alleviate financial burdens but also demonstrates the Government’s commitment to creating favorable conditions for production and business activities. Hopefully, these efforts will yield positive results, assisting Vietnam’s economy in quickly recovering and sustainably developing in the future.

Phan Chinh