Although the pace of urbanization is relatively rapid, especially in big cities, Viet Nam is falling into low-density land use.
Waste of land resources
Analysis of the status of urban planning and land use in our country, Ministry of Construction evaluate of land use in urban areas is not effective. Many cities, because of their impatience, expand their urban area, scatter investment on a large scale instead of focusing on areas linked to infrastructure.
“Viet Nam is in low-density land use, leads to redundant land that has not been put under management yet, which easily leads to encroachment” said Minister of Construction Pham Hong Ha.
In relation to this issue, Mr. Tran Hong Ha, Minister of Natural Resources and Environment also commented: “In urban areas, the public land for communes and wards manage many places where encroachment occurs, misuse due to oversight. In Ha Noi and some areas that redundant land such as riverside alluvium is falling into this situation.
Apart from wasting land, planning, experts say Viet Nam is wasting plenty of resources for urban development as a source of revenue.
Currently, Vietnam’s land use tax only accounts for 0,03% of GDP and about 0,15% of total state budget revenue. Meanwhile, the income from property taxes in some countries is much higher, for example in Canada is 4% in the US is from 1 to 3%. Other countries with lower rates also fall between 0,6-0,68%. The value of land in Vietnam in 2010 is over $200 billion, which is higher than GDP. Therefore, according to experts, the State needs to change in the management mechanism, to adopt appropriate policies to avoid wasting resources.
Recently, the Ministry of Finance also proposed to complete the tax policy with real estate to increase the ability of the State to regulate the market. According to the Ministry of Finance, in order to control, stabilize the market and limit real estate speculation, it is necessary to study and develop the Law on Property Tax.
Will increase revenue from land
According to experts, Vietnam is wasting land because it only collects money when transferring the right to use. In addition, mechanisms, methods of calculation are not transparent, pure should be the waste.
“We propose property tax law, land use right transfer tax, with periodic adjustments to generate long-term revenue. This is a core issue, a major resource for urban development, not just for socialization” said the Minister of Construction.
Actually, people pay land use fee when changing the purpose of land use in the land price, when calculating the land use levy for state-owned enterprises, the market price is calculated. However, due to the large difference between these two prices, valuation, land use fee determination is often inaccurate. There is a case where the business is “running” to get a little land use as possible, resulting in a loss to the state budget.
Another noteworthy proposal of the Ministry of Construction, in the coming time, the land auction policy will be applied to limit the ineffective and encroachment of urban land use.
Share with reporters, economic expert Nguyen Minh Phong said that the auction of land is necessary, in addition to the need to consult the surrounding land prices to get good rates, there must be an independent evaluation unit and this unit will be held liable for any wrongdoing in pricing.
With incentive projects, land use fees may be exempted, but for land acquisition projects or for resale, high rates of taxation are required. Basically, the active exploitation of resources from the land is correct” Mr. Phong added.
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