The National Assembly Standing Committee discussions at the 43rd session. — VNA/VNS Photo Doãn Tấn

HÀ NỘI — The National Assembly (NA) Standing Committee on Tuesday discussed reducing land rent payments for fiscal year 2024 as part of the working programme at its 43rd session.

Deputy Minister of Finance Bùi Văn Khắng said that the expected reduction in land rent according to the draft decree is about VNĐ4 trillion (US$157.1 million), equivalent to 0.26 per cent of the total State budget revenue per year and 9 per cent of the State budget revenue from land rent per year (calculated according to 2023 data).

Khắng presented a Government report showing that, to remove difficulties and support production and business activities, the Ministry of Finance would work with agencies and localities to research and submit proposed land rent reductions to the Government and the Prime Minister.

Chairman of the NA’s Economic and Financial Committee Phan Văn Mãi said that most of the committee members agreed on the necessity of reducing land rent as proposed by the Government.

During the discussion, some committee members said that the Government's regulations on reducing land rent were too broad, and the Government's submission has not clarified other cases under the authority of the NA Standing Committee as prescribed in Clause 1, Article 157 of the Law on Land 2024.

On February 12, the Government issued Resolution No 31/NQ-CP on submitting the proposed land rent reduction to the NA Standing Committee for comments and promulgating a Government Decree regulating the issue.

The Minister of Finance was assigned to sign the Government's submission on behalf of the PM.

Clause 2, Article 157 of the Law on Land 2024 states: "The Government will prescribe other cases of exemption or reduction of land use fees and land rents not specified in Clause 1 of this Article after obtaining the consent of the NA Standing Committee.”

Under this clause, the Government can therefore issue a decree regulating the reduction of land rents under its authority.

By February 25 this year, the Government had submitted a draft on the reduction of land rent to the NA Standing Committee for comments, so committee members said collecting and refunding land rent or imposing late payment penalties has been slow and difficult.

Reducing land rent will lower costs and increase taxable income corresponding to the amount of land rent reduction, thereby increasing corporate income tax payable for the 2024 fiscal year.

Enterprises must therefore also declare and adjust their tax reports and financial reports for 2024, including land rent and corporate income tax payments.

The NA’s Economic and Financial Committee and Culture and Social Affairs Committee requested the Government clarify the impact of the reduction to State budget revenue, as well as the handling of the above issues when implementing land rent reductions for the 2024 and 2025 fiscal years.

Some members of the NA’s Committee for Economy and Finance asked the Government whether the policy would be conducted in the following years or not, to avoid submitting a similar policy multiple times with complicated procedures, reducing the policy's effectiveness.

Clarification

Explaining the issue, Deputy Minister Khắng said that the exemption and reduction policy had been implemented in 2023.

According to statistics from the Tax Department, more than 29,700 organisations and individuals benefit from the policy, with exemptions and reductions amounting to approximately $157.1 million.

The tax reduction has supported businesses, households and individuals in overcoming difficulties caused by the COVID-19 pandemic so that they can quickly restore production and business activities.

Khắng explained the timing of the policy, stating that last year, due to difficulties faced by businesses, the Government decided to extend the land rent payment deadline until December 31. Thus far, most businesses have not yet paid, so reductions are not affected.

When the decree is issued, those organisations and businesses that have already paid land rent will be able to deduct the payments from their land tax payments for the following years.

Concluding the session, NA Deputy Chairman Vũ Hồng Thanh said that on February 25, the Government submitted a document to the NA Standing Committee for comments on the reduction of land rent, noting that the Government should learn from this experience.

The delay has caused difficulties in collecting and refunding land rent. It has an insignificant impact on budget revenue, but a huge impact on production and trading for enterprises and people, Thanh said.

At the session, all NA Standing Committee members agreed to reduce land rent payments for 2024. — VNS