Land rent reduction provides a significant boost to support enterprises and individuals

30% reduction in payable land rent in 2023

Deputy Prime Minister Le Minh Khai has recently signed Decision 25/2023/QD-TTg on reducing land rents in 2023 in order to have more resources to support businesses and individuals in responding to difficulties and challenges. Accordingly, this decision calls for a 30% reduction in payable land rent (arising from revenue) for land tenants in 2023; no reduction shall be made on outstanding land rent from prior years or late payments (if any).

The decision's subjects are any organizations, units, enterprises, households, and individuals that are directly renting land from the State or have contracts or certificates of land use rights, ownership of houses, and other land-attached assets issued by competent state agencies in the form of annual land lease payments.

This provision applies to both cases where land tenants are not subject to exemption or reduction of land rent, the expiration of the exemption or reduction of land rent, and cases where land tenants are entitled to land rent reduction under Land Law (the Land Law and the documents detailing the Land Law) and other relevant laws.

By the law, the above-mentioned land rent reduction is calculated on the amount of land rent payable (arising from revenue) in 2023.

If the land tenant receives a reduction in land rent as prescribed or/and deducts compensation and ground clearance under the Law on land rent, the 30% reduction in land rent shall be calculated on the amount of land rent payable (if any) after being reduced or/and deducted in accordance with the law (except for the amount of land rent reduced according to Prime Minister's Decision No. 01/2023/QD-TTg dated January 31, 2023).

Practical assistance to businesses

While evaluating the implementation of policies to support businesses and individuals, many people have claimed that solutions to aid them with taxes, fees, charges, and land rents have helped in overcoming difficulties and restoring stable production and business activities. These policies have also contributed to maintaining a stable life, social order, and safety, laying a strong foundation for the recovery and development of the national economy.

According to Assoc. Prof. Dr. Dinh Trong Thinh, Senior Lecturer at the Academy of Finance, the issued support policies have created a sum of money for businesses to use, allowing them to avoid borrowing from banks or other sources, to be more proactive in production and business activities, thereby speeding up the recovery and development process.

The business community's tax remission policies are greatly appreciated. According to Nguyen Trong Quynh, Deputy General Director of Amaccao Group (Seraphin Garbage Power Plant Project in Ho Chi Minh City), as an enterprise building many environmental treatment projects, the reduction in land rent is a great and practical incentive for enterprises. This is the sharing of the Government as well as the localities for enterprises and investors.

Nguyen Tuan Son, Deputy General Director of Ha Bac Export Garment Joint Stock Company, stated that the amount of support, whether more or less, is critical for enterprises. When there is more capital for enterprises to maintain production and business, stable jobs are created. The reduction of land rent boosts enterprise development, stabilizing the State budget.

At the 12th meeting, the Hanoi People's Council in the 16th tenure (term 2021-2026) continued to pass a resolution on land rent exemption and reduction based on a list of fields and preferential areas for a variety of socialization activities in Hanoi. Hanoi will provide preferential land rent in seven fields, including education, vocational training, health, culture, sports, the environment, and judicial assessment.

According to Mr. Do Hung Vuong, Head of Price Management Department - Hanoi Department of Finance, in the current context, the policy of land rent exemption and reduction has created a great motivation for enterprise production and business activities to promote socio-economic development in the city, while also encouraging and creating incentives to attract socialized capital and reduce the investment burden on the State budget./.