Reasons why Phu Cuong Kien Giang Company has not paid over 46 billion VND for land use

On March 8, Mr. Tran Van Dien – Director of the Tax Department of Kien Giang Province – discussed with Người Lao Động newspaper about the information that Phu Cuong Kien Giang Joint Stock Company (Phu Cuong Kien Giang Company) has not paid the land use fee of 46 billion VND.

According to the leaders of the Kien Giang Provincial Tax Department, Phu Cuong Kien Giang Company is the unit implementing the BT31 project (in Zone I, the new urban area of Phu Cuong, Rach Gia City, Kien Giang Province) according to a decision approving the investment policy approved by the Provincial People’s Committee on July 22, 2021.

On July 3, 2023, the Kien Giang Provincial Tax Department notified Phu Cuong Kien Giang Company to pay the fee for changing the land use purpose for the above project, which is more than 46 billion VND. The company believes that the amount of land use fee paid is too high and the calculation is not appropriate.

Afterwards, the company submitted a request to the Provincial People’s Committee and related departments and branches to reconsider the price for changing the land use purpose.

On December 19, 2023, the Party Committee of the Kien Giang Provincial People’s Committee issued conclusions and assigned the Provincial Department of Finance to take charge and hire a unit with independent consulting functions to determine the land price for surveying and defining. The Provincial Tax Department, according to its authority, considers temporarily suspending the implementation of financial obligations according to the previous announcement.

Mr. Dien said that after receiving the document from the Standing Committee of the Provincial People’s Committee, the unit canceled the notice to collect land use fees from Phu Cuong Kien Giang Company.

“The price proposed by the consulting firm may be too high. Although the appraisal council has agreed, after the announcement was made and there were objections, the actual situation was determined to be high and the investor did not make a profit, especially in the current difficult period. From there, the Permanent Committee of the Provincial People’s Committee sent a document to the Tax Department, temporarily not applying measures to handle the debt with Phu Cuong Kien Giang Company, waiting for the Provincial Department of Finance and the Department of Natural Resources and Environment to hire independent consultants to determine the land price,” Mr. Dien said.

According to Mr. Dien, it is very difficult to hire consultants because not only Kien Giang but the whole country also has difficulty hiring consulting units to appraise projects, leading to prolonged incidents.

“This incident also greatly affects the tax industry. In the past few days, the Provincial People’s Committee has directed the relevant units such as the Department of Finance and the Department of Natural Resources and Environment to act promptly and resolutely. We also want to handle the problem thoroughly to collect revenue instead of leaving it indefinitely. After redefining, the Department of Natural Resources and Environment has canceled the information announcement of the land price, and the Provincial Tax Department has also canceled the tax collection notice, so this case is not considered as a tax debt enterprise and does not violate the Tax Management Law.

This is the first case that has occurred in the area. After many surveys, we realized that the demands of the businesses are reasonable, so the province will consider them, instead of considering every request,” Mr. Dien said.

As informed, on February 23, 2024, the Kien Giang Provincial Inspection Board issued an inspection conclusion on the planning issue and the implementation of construction planning for the Department of Construction and the district and city People’s Committees in Kien Giang province.

Accordingly, the inspection concluded that Phu Cuong Kien Giang Company adjusted the land use planning in the BT31 area in Zone I of the new urban area of Phu Cuong.

However, the notice was overdue, and the company did not pay the land use fee with an amount of more than 46 billion VND, which is in violation of Clause 4, Article 18 of Decree No. 126 dated October 19, 2020, of the Government, which details certain articles of the Tax Management Law.

According to the inspection conclusion, Phu Cuong Kien Giang Company implemented the partial adjustment of the commercial service land in the central roundabout of Phan Thi Rang (Phu Cuong New Urban Area), changing the land use purpose, but the company has not completed the procedures for changing the land use purpose up to now.