The National Assembly Standing Committee Agrees to Cut Land Rental Fees by VND 4,000 Billion in 2024

On March 11th, the National Assembly’s Standing Committee (NA SC) continued its 43rd session, giving opinions on the reduction of land rent for 2024 and the issuance of a governmental decree regulating the same.

According to the Government’s proposal, to continue removing difficulties and supporting production and business activities in 2024, the Government has assigned the Ministry of Finance to coordinate with agencies, localities, corporations, and companies to urgently study and submit to the Government and the Prime Minister for consideration and issuance of regulations on reducing land rent in 2024, similar to what was done in 2023.

Based on the recommendations of ministries, sectors, localities, corporations, and companies, the Ministry of Finance has developed a draft governmental decree regulating the reduction of land rent for 2024. The Ministry also submitted Document No. 405 dated December 27, 2023, to the Government, seeking opinions from the NA SC on the reduction of land rent for 2024 and the issuance of a governmental decree regulating the same.

On February 12th, based on the opinions of Government members, the Government issued Resolution No. 31 on submitting to the NA SC for opinions on reducing land rent for 2024 and issuing a governmental decree regulating the same.

Therefore, the Government proposed to the NA SC a 30% reduction in land rent for 2024 so that the Government could issue a decree regulating the reduction of land rent for 2024 within its competence.

The decree stipulates a 30% reduction in land rent for 2024 compared to the amount of land rent payable for that year. The reduction is calculated based on the land rent payable for 2024 as per the law and does not apply to overdue payments from previous years or penalties for late payment, if any.

Regarding the impact on state budget revenue, the Government estimated that the amount of land rent reduction according to the draft decree would be approximately VND 4 trillion (equivalent to the amount of land rent reduction for 2023 with a 30% reduction nationwide), corresponding to 0.26% of the total state budget revenue and 9% of the state budget revenue from land rent for one year (based on 2023 data).

According to the Ministry of Finance, the reduction in land rent will not significantly affect state budget revenue but will have a significant impact on the recovery and development of production and business activities of organizations, individuals, households, and enterprises, thereby increasing tax revenue to compensate for the reduction in land rent revenue.

As per the draft decree, the subjects of application are land users who are directly leased land by the State through land lease decisions, contracts, or certificates of land use rights and ownership of assets attached to the land by competent state agencies in the form of annual land rent payments that are valid in 2024.

In case the land user has not completed the legal procedures for land in 2024 but has completed them by the time of submitting the application for land rent reduction as prescribed in this decree, they will still be eligible for the reduction.

Subsequently, all NA SC members present at the session agreed with the Government’s proposal to issue a decree reducing land rent for 2024 for subjects as mentioned in the proposal.

The NA SC requested the Government to take responsibility for the accuracy of the content, information, and data reported and the necessity of building and issuing the decree regulating the reduction of land rent for 2024, ensuring compliance with legal regulations. The Government was also tasked with directing the handling of difficulties and obstacles in collecting, paying, and refunding land rent or late payment penalties for cases of late payment of land rent in 2024 by subjects eligible for the reduction.