16:13 13/08/2021

VCCI proposes higher cuts to land rentals for Covid-hit businesses and individuals

Tra My -

Business association recommends the 30 per cent reduction within a draft NA Standing Committee decision be increased to 50 per cent.

Photo: Illustration
Photo: Illustration

The Ministry of Finance finished developing a draft decision for the National Assembly Standing Committee in early August that will promulgate solutions in State budget collection to support businesses and individuals affected by Covid-19. Compared with the Prime Minister’s Decision No. 22/2020/QD-TTg dated August 10, 2020, on reductions to land rentals in 2020 for those affected by Covid-19, the draft raises the reduction of payable land rentals from 15 per cent to 30 per cent and adjusts certain regulations to support beneficiaries.

On August 10, however, the Vietnam Chamber of Commerce and Industry (VCCI) suggested raising the reduction on land rentals to 50 per cent this year, in order to remove difficulties facing production and business. According to the drafting board, a reduction of 30 per cent would total some VND700 billion ($30.50 million), so a 50 per cent reduction would be in the order of VND1 trillion ($43.55 million).

“This [30 per cent] is not a significant reduction, especially as the Resolution from the National Assembly states that to reach annual economic growth goals, State budget revenue in 2021 is estimated to exceed VND42-72 trillion ($1.84-3.15 billion),” the VCCI emphasized. It therefore proposed the drafting board raise the reduction to 50 per cent.

The VCCI also pointed out that under the provisions of Clause 2, Article 5 of the draft, the time limit for authorities to determine the amount of any reduction and issue a decision is counted from the time of receiving “complete and valid dossiers”. However, the draft does not stipulate the time limit for considering the validity of the dossier, which may make procedures less transparent. It proposed the drafting board stipulate this time limit as one working day from the date of receipt.

In addition, Clause 1, Article 5 stipulates that the application of land rental reductions must be submitted within the period from the effective date of the decision to December 31, 2021. However, the draft does not stipulate if this regulation is also applied to cases of tenants who were eligible for land rental reductions in 2020 under Decision No. 22 but failed to submit an application. The VCCI therefore proposed the Drafting Committee introduce clear regulations to ensure smooth implementation.