[Audio] Why is land use fee collection low?

According to the Provincial Property Auction Service Center, the average success rate of auctions of projects since the beginning of the year has been low. In the photo: People visit the residential project site in Nam Sach after the auction.

Absent land auction participants

At 8:00 a.m. on April 13, the residential area project of the Worship of Debt in Doan Tung commune (Thanh Mien) officially welcomed people to see the actual land for auction. According to information from the Doan Tung commune government, the project to be auctioned is a land area of ​​nearly 10,800 m2 including 126 plots of land with areas ranging from nearly 84 m2/plot to 117 m2/plot. The starting price for the auction at that time was from 15-17 million VND/m2.

Mr. Le Van Sang in Ngo Quyen commune (Thanh Mien) is one of those who have researched this project and planned to bid. “After thinking it over, my family realized that the price is relatively high, the real estate market is currently quiet, if we participate in the auction, the economic efficiency will be low,” said Mr. Sang.

Many other people shared the same thought as Mr. Sang. Therefore, on April 22, the time of auctioning the land use rights of the above project, only 7 lots won the auction, accounting for 5.5% of the total lots put up for auction.

Mr. Nguyen Anh Tuan, Chairman of the People's Committee of Doan Tung Commune, said that the sluggish situation in land auctions was predictable. “In the context of the real estate market being sluggish since the second half of last year, the land prices currently being auctioned are still high. People tend to wait for prices to decrease and at the same time listen for signs of recovery in the real estate market before making a decision. To improve the effectiveness of the next auction, it is thought that the starting price should be adjusted to match the market reality,” said Mr. Tuan.

At the group discussion session within the framework of the 16th session of the 17th Provincial People's Council (July 12-13), Deputy Secretary of the Town Party Committee, Chairman of the Kinh Mon Town People's Committee Truong Duc San pointed out the difficulties in auctioning land in residential areas to create resources. "Almost no one comes to the auction. Enterprises also rarely invest in urban area projects," said Mr. San.

The sluggish auction of land is a situation not only in Hai Duong but also in many provinces and cities. Many reasons have been pointed out, mainly because the real estate market is still in a "cooling" period, many businesses and individuals have difficulty mobilizing financial resources.

The real estate market is sluggish, and auction prices for land remain high, causing most land auctions to be sluggish. In the photo: The residential project of the Temple of Debt in Doan Tung commune (Thanh Mien)

What is the solution?

According to the data reported at the 16th session of the 17th Provincial People's Council, of the 16 budget revenue items, land use fee revenue is one of the 6 revenue items that is lower than the estimate. By the end of the first 6 months of 2023, land use fee revenue reached nearly 1,188 billion VND, equal to 32% of the annual estimate, equal to 42% compared to the same period in 2022. Of which, 5 localities have very low revenue, only from 1-5% of the annual estimate.

In the first 6 months of this year, the Provincial Property Auction Service Center coordinated to auction hundreds of land lots in Hai Duong City and Gia Loc, Ninh Giang, Thanh Mien, and Nam Sach districts. Of which, only 13 land lots in Thanh Binh Ward (Hai Duong City) and 46 land lots in Hung Long Commune (Ninh Giang) achieved a 100% successful auction rate. "The remaining land lots achieved a low successful auction rate. The difference between the starting price and the selling price was also low, only 14.7%. Meanwhile, all assets auctioned through our center in 2022 reached 100%, the difference between the starting price and the selling price was 41.4%," said Mr. Hoang Van Son, Director of the Provincial Property Auction Service Center.

According to Mr. Son, to improve the efficiency of land auctions, projects need to research and offer appropriate prices, close to the market, in a direction that buyers with real needs can accept.

Another reason for the province's low land use fee revenue is that businesses are late in paying land use fees for residential and urban area projects that have been notified by the tax authority to pay taxes. The sluggish real estate market has caused businesses to have difficulty finding a market, leading to financial difficulties. According to data from the Provincial Tax Department, as of July 14, 2023, only 4 out of 10 businesses had paid part of the money to the budget, the remaining amount to be paid was more than VND 1,900 billion, of which the amount committed to be paid by the end of 2023 was VND 933 billion.

Mr. Do Cong Tien, Director of the Tax Department, said that the provincial tax sector strives to collect VND3,700 billion in land use fees this year. “We will continue to review land plots and land plots in residential areas and interspersed areas, determine the land area that meets planning conditions to coordinate and advise on organizing land use rights auctions, helping to increase budget revenue. The tax sector will also strengthen tax debt collection, especially for the 10 enterprises mentioned above,” Mr. Tien said.

HA KIEN