Hanoi faces mounting land tax arrears
The Economic and Budget Committee of the Hanoi People’s Council revealed that from 2021 to 2023, the city witnessed a year-on-year surge in budget arrears.
Notably, land-related tax debts accounted for over 50% of the annual total budget arrears. For instance, in 2021, land tax arrears amounted to VND 11,840 billion, nearly 56% of the total. This figure rose to VND 13,545 billion in 2022, constituting almost 58% of the total, and further climbed to nearly VND 15,470 billion in 2023, making up close to 54% of the total arrears.
For three consecutive years since 2021, land tax arrears have significantly increased, surpassing 50% of Hanoi’s state budget arrears. Picture: The National Sports Complex owes VND 895 billion but is unable to pay. |
The Economic and Budget Committee also pointed out the factors contributing to the accumulation of land tax debts. Specifically, several large entities incurred substantial financial obligations related to land but lacked the capacity to fulfill their payments. These include the National Sports Complex with a debt of VND 895 billion, the Vietnam Shipbuilding Industry Corporation owing VND 173 billion, the Vietnam Railways Corporation with a debt of VND 484 billion, and Asia Company with VND 617 billion in arrears.
Additionally, 24 projects that were allocated land with payment obligations are delinquent on their land tax payments, totaling approximately VND 2,800 billion. There is also an outstanding debt of over VND 4,000 billion awaiting settlement, associated with financial obligations related to land. This particular debt accounts for 26% of the total tax arrears.
Simultaneously, addressing these debts awaiting settlement is of utmost importance in reducing Hanoi’s overall debt. The remaining debts awaiting processing primarily involve financial obligations related to land, handled by various departments and sectors. Many of these cases have lingered for years without a definitive resolution.
According to the Economic and Budget Committee, urging enterprises with land tax debts to settle their arrears has proven challenging due to the loss of payment capacity among many businesses. Currently, numerous companies exhibit no production or business activities, rendering enforcement measures ineffective, resulting in substantial late payment charges.
Implementing the conclusions of inspections and audits is also difficult in certain cases, such as with bankrupt or investigated enterprises that lack the means to settle their debts…
The Committee identified several causes for this situation, including a lack of firmness and initiative in determining, managing, and urging the recovery of debts.
Another factor is the delayed resolution and progress update of taxpayers’ proposals and difficulties. Some cases have extended for years without a conclusive solution, especially in determining and reviewing land use fees. Examples include Vinaland JSC and VNT LLC, which are implementing the project of a park and lake regulation in the Southwest Hanoi Urban Area…
Unveiling major tax-delinquent projects awaiting settlement
To address this situation, the Economic and Budget Committee proposed that the Hanoi People’s Committee and the Steering Committee for Urging the Collection of Overdue Tax, Land Use Fees, and Land Rent Arrears direct the departments and sectors to collaborate closely with the Hanoi Tax Department in urging the settlement of tax and fee arrears.
They should intensify inspections and handle cases of intentional violation and delinquency in tax and fee payments. It is also crucial to continue reviewing projects with financial difficulties related to land and promptly address them according to their authority.
The new Phu Luong urban area (Ha Dong district) is among the projects with significant tax debts awaiting settlement. |
Concurrently, they should scrutinize and impose sanctions on instances of deliberate land misuse, delayed implementation, or deliberate delay in fulfilling financial obligations to the state budget.
In cases where investors lack the financial capacity to continue with their projects, the authorities should resolutely reclaim the projects, revoke the land allocation or lease decisions, and opt for auctions or bidding to select capable investors. This will prevent the wastage of land resources and revenue loss for the budget.
Furthermore, the concerned agencies should review and address the proposals of the tax authority during the supervision of the Committee. Notably, several projects have substantial tax debts, including the new Phu Luong urban area (Ha Dong district) developed by the Trung Viet Investment and Construction JSC; Dreamland Plaza, a mixed-use project of office, service, and residential spaces, by Vinaland Real Estate Investment JSC; the 18th Corporation’s project of high-rise apartments and housing for workers in industrial parks;
the Stone Table Lakeside residential area project by Stone Table Lakeside Real Estate JSC; the 2.5-km road project from Dam Hong to National Highway 1A in the form of BT by Hoang Ha Construction JSC; and the Phu Lam high-end commercial, service, office, and residential complex by Lam Son JSC…
By Dinh Phong
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