On September 10, the People’s Committee of Gia Lai province, Vietnam, instructed the provincial Department of Planning and Investment to coordinate with relevant agencies to terminate a rubber plantation project on degraded forest land, with the investor being Duc Long Gia Lai Joint Stock Group (Duc Long Gia Lai). The decision was made due to the company’s failure to fulfill its financial obligations and lack of project implementation.
Acquiring Land but Leaving It Idle
In line with the Vietnamese government’s policy to allow Gia Lai province to convert 50,000 hectares of degraded forest into rubber plantations, between 2008 and 2012, the provincial authorities handed over more than 35,000 hectares of forest land to 16 enterprises, including Duc Long Gia Lai. However, violations were later detected in their operations.
After 11 years, not a single rubber tree can be found in the project site.
Approved in 2011, the project involved the conversion of nearly 900 hectares of forest land into rubber plantations. Over 11 years since the land lease, Duc Long Gia Lai has only completed preliminary steps such as digging protective trenches, building temporary housing for forest guards, establishing a tree nursery, and conducting surveys for timber exploitation design.
The company has not yet started rubber planting and owes the state budget approximately VND 13.7 billion in land rent and late payment penalties as of the inspection time.
Notably, since 2014, the Government Inspectorate has discovered that local authorities neglected to timely address the company’s arrears of nearly VND 900 million in land use fees, land rent, environmental restoration deposits, and resource taxes.
In 2017, Mr. Ngo Ngoc Sinh, Chief of Office of the Provincial People’s Committee, signed a notice on the direction of Mr. Kpă Thuyen, Vice Chairman of the Provincial People’s Committee, stating that “Duc Long Gia Lai is allowed to continue implementing the rubber plantation project on 209.5 hectares of non-forest land. For the remaining 554.4 hectares of degraded forest land, the company is permitted to continue managing and protecting the existing forest.”
This decision contradicted the Prime Minister’s Directive No. 191/TB-VPCP dated July 22, 2016, on solutions for sustainable forest restoration in the Central Highlands to adapt to climate change for the period of 2016-2020.
From Rubber Plantation to Solar Power Project
According to Mr. Nguyen Tuong Cot, General Director of Duc Long Gia Lai, after receiving the site handover, the company proceeded with the necessary steps for timber exploitation and design approval. However, they encountered obstacles due to discrepancies in the volume of timber and firewood between the designed and actual conditions.
The company reported the issue, and the provincial authorities instructed relevant sectors to re-evaluate and recalculate the actual volume of timber and firewood. Still, the project’s subsequent steps could not be implemented due to the Prime Minister’s directive to stop timber exploitation in natural forests.
Mr. Cot stated that the company had invested significant amounts with no revenue or profit generated from the project so far. After the project’s suspension, the company proposed converting the project into a combination of forest plantation, high-tech agriculture, and solar and wind power on 764.1 hectares, but this proposal has not been approved by the provincial authorities.
Duc Long Gia Lai has also requested waivers or exemptions from land rent and late payment penalties due to objective reasons. Since 2019, several meetings have been held to address the company’s proposals, but no conclusion has been reached.
Request for Tax Exemption
Based on the conclusions of the Government Inspectorate, the provincial authorities held a meeting with the participation of relevant departments and enterprises to discuss the project’s status and issues related to land rent. At the meeting, Mr. Bui Phap, Chairman of Duc Long Gia Lai’s Board of Directors, asserted that the project’s stagnation resulted from objective factors related to policies and directives. He requested the consideration of canceling or recalculating the taxes imposed on the project.
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From 2020 onwards, Vietnam has implemented an expansionary fiscal policy, providing relief to businesses and citizens through tax breaks, waivers, and deferrals amounting to nearly VND 200,000 billion per year. This has resulted in an estimated 17.8% year-on-year increase in state budget revenue for the first eight months of this year, indicating a robust economic growth trajectory. With predictions of reaching 6.5% growth in 2025-2026, the question arises: What should Vietnam’s fiscal policy look like going forward?
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