Ministry attempts to apply progressive tax on pending projects

VietNamNet Bridge – The Ministry of Natural Resources and the Environment (MONRE) believes that the progressive taxation would be effective in “overpowering” the investors slow in implementing their projects.

pending projects, tax, monre

When answering the inquiries of the National Assembly’s Standing Committee, MONRE Minister Nguyen Minh Quang suggested imposing the progressing tax instead of revoking projects as currently applied.

According to Quang, the tax rate would be increasing year after year, which would force the investors to implement the registered projects as soon as possible.

It has been a headache to the state management agencies that a lot of investors registered their investment projects just to “make reservation” or occupy the land plots, while they do not intend to develop the projects wholeheartedly.

Quang explained that if the solution is applied, the state management agencies would not have make the decisions on revoking the investment licenses any more, because the investors would decide themselves whether to reserve the land.

The director of an enterprise who received 100 hectares of land to develop a real estate project in Hoai Duc district in the former province of Ha Tay jumped on the news. “Real estate firms are now in big difficulties. If the proposal is applied in the context of the frozen real estate market, we will die surely,” he said.

The real estate developer got the land allocated in 2008, but he still cannot implement the project.

However, the director said that it is necessary to clarify if the investors deliberately delay the project implementation, or they cannot implement the projects because of the objective reasons which are not within their reach.

“Right after we got the license for the project, Ha Tay province became a part of Hanoi. This means that we still need to wait for the capital development program and the regional development program to be made, and only by that time, will we be able to kick off the projects,” he said.

“In this case, it is not the investor who should be blamed for the delay,” he said, adding that it is necessary to impose punishments on the state management agencies which cause the delay.

According to Nguyen Tran Nam, Deputy Minister of Construction, in mid-2012, he instructed relevant branches to check the implementation of the projects in big cities and revoke the projects whose investors cannot meet the requirements.

However, by mid-2013, the relevant branches and local authorities had proposed to revoke only 1 percent of the total real estate projects. The figure was too small, if noting that the ministry expected to see 30-40 percent of the projects to be revoked.

Explaining this, former Deputy Minister of MONRE Dang Hung Vo said under the current regulations, when revoking real estate projects, competent agencies have to reimburse the investors the money they put into the projects before, including the money for compensation for site clearance. However, this proves to be impossible.

Experts have just commented that the state management agencies need to think twice before making decisions, because an unreasonable policy would cause chaos.

They have recalled the proposal to tax the uninhabited villas made in 2011 and 2012, aiming to minimize the number of unoccupied houses which affects the urban landscape and the social security. The 5-10 percent taxation was suggested to restrict the real estate speculation.

However, the suggested solution has fallen into oblivion.


pending projects, tax, monre