Proposal to reduce 30% of land rent in 2024

Proposal to continue reducing land rent to help generate more resources to support businesses and people in coping with difficulties and challenges. Illustration photo: H.Anh

Proposing 2 solutions

To provide additional support for businesses and individuals facing challenges and natural disasters—particularly those affected by Typhoon Yagi (Storm No. 3)—the Ministry of Finance has developed a draft decree proposing a 30% reduction in land rent for 2024.

Previously, the Ministry of Finance had submitted proposals to the Prime Minister to implement land rent reductions during 2020, 2021, 2022, and 2023 to assist businesses and individuals impacted by the COVID-19 pandemic, contributing to economic recovery and growth.

According to data from the General Department of Taxation, the reductions in land and water surface rents provided relief of VND2.89 trillion in 2020, and an average of VND3.734 trillion per year in 2021, 2022, and 2023.

In 2024, global economic risks continued, compounded by increasing frequency and severity of natural disasters caused by climate change, posing threats to food security, energy security, and social stability. Notably, Typhoon Yagi caused severe damage in several northern provinces of Vietnam, further straining businesses and local communities.

Against this backdrop, the Government tasked the Ministry of Finance with drafting policies to reduce land rent in 2024, ensuring compliance with the Law on Land 2024 and Decree No. 64/2024/ND-CP dated June 17, 2024, regarding extensions for tax and land rent payments in 2024.

Regarding the reduction of land rent, the initial draft proposed two options: a 15% reduction or a 30% reduction in land rent for 2024. However, given the slower-than-expected economic growth and the estimated 0.22% decrease in Q4 GDP due to Typhoon Yagi, the Ministry decided to retain Option 2, recommending a 30% reduction.

Accordingly, Article 3 of the draft decree stipulates a 30% reduction in land rent for 2024 for organizations, businesses, households, and individuals leasing land directly from the State under decisions, contracts, or certificates of land use rights, house ownership, and assets attached to the land issued by authorized government agencies, where rent is paid annually.

Impact on State budget revenue

The reduction in land rent for 2024 will be calculated based on the payable land rent amount for the year 2024, as stipulated by law. The reduction will not apply to outstanding land rent debts from previous years or any late payment penalties incurred before 2024.

For cases where land lessees are already entitled to land rent reductions or compensation and site clearance deductions as prescribed by law, the 30% reduction will be applied to the remaining payable amount after such adjustments or deductions have been made, in accordance with legal regulations.

According to the Ministry of Finance, the proposed land rent reduction under the draft decree is estimated to be approximately VND4 trillion —equivalent to the reduction granted in 2023, which applied a 30% cut nationwide. This reduction accounts for about 0.26% of total annual state budget revenue, and 9% of annual revenue from land rent collections (based on 2023 data).

Based on data recorded in the TABMIS accounting system, by July 31, 2024, total balanced state budget revenue had reached VND1.234 trillion, fulfilling 72.65% of the 2024 target and reflecting a 19.09% increase compared to the same period in 2023. Revenue from land and water surface leases totaled VND24.681 trillion, achieving 91.63% of the projected target.

Given the anticipated economic recovery and growth in 2024, supported by the Government’s fiscal and monetary policies and the collective efforts of the political system, the 2024 state budget revenue approved by the National Assembly is expected to meet or exceed targets.

To streamline implementation and avoid administrative complexities, the Ministry of Finance proposes that application requirements consist of just two documents including a request form for land rent reduction in 2024, as specified in the appendix attached to the decree, and a copy of the land lease decision, contract, or land use rights certificate issued by authorized government agencies.

Under the draft decree, taxpayers will be responsible for the accuracy and truthfulness of their information and declarations when applying for reductions, adhering to the principles of self-declaration and self-payment as per current regulations.