Complete land law to prevent loss of resources

	Must pay rental land fee if using public land for business
	Land for irrigation and transportation: Free of charge

There has been a state of budget loss from putting public land into the market, wasteful use of public land, inefficient capitalization of land. Source: Internet.

Budget losses from land prices

According to Prof. Dang Hung Vo, former Deputy Minister of the Ministry of Natural Resources and Environment, in fact, the land is being used wastefully, inefficiently, the financial resources from the land are not fully exploited, the revenues from land are too low compared to the current potential and the state still lost revenue. “The land price frame and land price table are always lower than the market price, the specific valuation process still does not fully guarantee independence and objectivity. There has been a state of budget loss from the introduction of public land into the market, wasteful use of public land, inefficient capitalization of land,” said Professor Dang Hung Vo. Also according to Prof. Dang Hung Vo, the land tax system is too low, not a tool to regulate the market, the transparency of the information on land economic management is weak, the participation of the non-state actor is still limited due to the lack of specific methods to implement and no accountability has been implemented.

According to Mr. Le Hoang Chau, Chairman of Ho Chi Minh City Real Estate Association, land is a valuable resource of the country. The Land Law has been increasingly improved, positively affecting the socio-economic development of the country, but the current land resources have not promoted the highest efficiency stem from the legal system, is not really complete and the weakest stage is still the implementation of land law; among the 10 major limitations of the land legal system, which reduces the efficiency of land economy - land finance, stated by Mr. Le Hoang Chau. Mr. Chau emphasized that the land use fee is a state budget revenue that is stipulated in the Land Law, which should have been stipulated in the Tax Law on the principle that all state budget revenues are taxes and fees stipulated in the Tax Law. "Land use fees that are currently "unknown" do not guarantee transparency and predictability before making investment decisions; The land use fee is a burden for both investors and consumers and is creating a mechanism of "asking - giving", leading to the loss of state budget due to the "double sawing, triple sawing" agreement,” Mr. Le Hoang Chau said.

About state budget revenue from land, Assoc. Prof. Dr. Nguyen Dinh Tho, Department of Economic and Land Fund Development (General Department of Land Administration) said that the land rent accounted for only 9.66% - 19.06% of the total revenue from land and tends to increase over the years (2016 reached 23,672 billion VND, accounting for 19.06%). And the non-agricultural land use tax revenue only accounts for 1.14% - 2.46% of the total revenue from the land and tends to decrease over the years (in 2016 reached 1,417 billion VND, accounting for 1.14%). In addition, personal income tax from land use right transfer only accounts for 0.42% -1.93% of the total revenue from land and tends to decrease over the years (in 2016 reached 627 billion VND, accounting for 0.51%).

Mr. Nguyen Dinh Tho also pointed out the limitations in current land price determination in Vietnam. Accordingly, the method of calculating land use levy and land rent in some cases is not appropriate. The determination of specific land prices for calculation of land use levies and land rents takes time and effort. Besides, investors cannot determine the input cost when implementing a project, and especially the land price in the land price table is much lower than the market land price.

Issue "Property – Real estate Tax Law" at the appropriate time

One of the solutions given by Mr. Nguyrn Dinh Tho to strengthen state management for land, is the construction of a land price grid. Accordingly, it is necessary to promote the implementation of bilateral and multilateral projects to apply advanced land valuation technologies of countries such as Japan and Korea in determining land prices for each parcel of land. At the same time, step by step building the land price grid on the basis of developing a value zone map for areas with similar characteristics on the basis of data on land price frame, land price list, and specific land price, that are determined through auction activities, compensation, agreements, and actual transactions.

Proposing the Government to change the current method of calculating land use fees, Mr. Le Hoang Chau proposed to add a new clause to Article 107 of the Land Law, specifically stipulating: "Collection of land use levies for cases of transferring items using land from agricultural land to residential land, with a fee equal to 15% (or ...%) of the land price table issued by the provincial People's Committee". In the long term, Mr. Chau proposes to determine the use of land fee as a tax, as proposed by the HCMC People's Committee to the Government as follows: "In the long term, it is recommended to abandon the concept of "land use levy" instead of replacing the land use tax with the tax rate. Certainly, about 10% or 15% of the land price list is proposed, thus ensuring transparency and easy to calculate and eliminate the application of “ask – give” mechanism, to limit the collection of land use fees for the first time and to maintain a sustainable and long-term revenue source for the State," said Mr. Le Hoang Chau. Implementing this calculation, according to Mr. Chau, in the short term, it is possible to reduce the source of state budget revenue, in this case, the State may consider issuing "Property - Property Tax Law" at the appropriate time (after 2020) to offset the budget revenue and will become a stable and sustainable source of revenue. The real estate market will therefore be more transparent; consumers will have the opportunity to benefit because housing costs would be less, and more favorable than before, because currently land use fees are accounting for about 10% of the price of apartments, above 30% of townhouse prices and about 50% of villa prices in the project.

Removing PPP bottlenecks to attract FDI into infrastructure VCN - On May 10, 2018, the Government issued the Resolution No. 54/NQ-CP approving the policies of the ...

Emphasis on limiting land prices far lower than the market at all times, specifically, Hang Dao, Hang Ngang and Le Thai To streets with the highest listed land prices at a specific level of 162 million VND/m2, but in fact, the price of land traded in the market is always much higher, popular with 500-800 million VND/m2, some places up to 1 billion VND/m2, Associate Prof. Dr. Ngo Tri Long also said that the revenue from land is loss, including land valuation. Regarding solutions to overcome limitations in land valuation, expert Ngo Tri Long said that when valuating land (for land to be recovered), there must be an agreement of the party whose land is acquired. This means that the person whose land is acquired. Recovery must be a part of the land valuation process. If no agreement is reached, the person whose land is recovered has the right to request an independent valuation agency to re-appraise it. "Land prices determined must be based on agreements with land users. In case no agreement is reached, the person whose land is revoked has the right to request the valuation agency to determine the price, the real estate price determined by the price of the valuation agency,” said Associate Professor Ngo Tri Long suggested.