The National Assembly Standing Committee has agreed to the government’s proposal to reduce land rent by 30% in 2024 and to issue a government decree outlining the specifics of the reduction.

During its 43rd session on the morning of March 11, the National Assembly Standing Committee discussed the issue of land rent reductions and the issuance of the corresponding government decree for 2024.

According to the government’s report, land rent reductions have been implemented from 2020 to 2023 to ease financial difficulties caused by the COVID-19 pandemic and to support economic recovery. The reductions under the Prime Minister’s decisions between 2020 and 2023 amounted to approximately $114 million, while annual reductions from 2021 to 2023 totaled $147 million.

Given the persistent economic challenges both domestically and internationally, the government has proposed a 30% reduction in land rent for 2024, aiming to provide additional financial relief to businesses and individuals. The policy is also designed to assist organizations and individuals affected by natural disasters and climate change.

Estimated fiscal impact

Presenting the proposal on behalf of the government, Deputy Minister of Finance Bui Van Khang stated that the projected reduction in land rent for 2024 is approximately $158 million, the same as in 2023. This amount accounts for 0.26% of total annual state budget revenue.

While the reduction will not significantly impact state budget revenue, it is expected to have a substantial effect on the recovery and growth of businesses, households, and individuals. The government anticipates that the economic recovery facilitated by this measure will lead to increased tax revenues, helping to offset the budgetary impact.

Phan Van Mai, Chairman of the Economic and Financial Committee, stated that most committee members agreed on the necessity of the 2024 land rent reduction. However, the committee and the Standing Committee on Culture and Society have requested that the government clarify the financial implications of reduced state revenue and address implementation challenges, especially in 2025 when the policy takes effect retrospectively.

Some members have also called for the government to clarify whether this policy will continue beyond 2024, arguing that submitting similar proposals repeatedly leads to lengthy procedural delays that can diminish the effectiveness of the policy.

Nguyen Dac Vinh, Chairman of the Committee on Culture and Society, emphasized the need to clearly define the beneficiaries of this policy. He also expressed concerns about the timing of its implementation, as the reduction for 2024 would be processed in 2025.

Beneficiaries of the policy

According to Deputy Minister Bui Van Khang, 29,734 organizations and individuals benefited from the 2023 land rent reduction policy. Among them were 23,487 businesses and 6,247 households or individual landlords, with a total exemption amount of approximately $158 million.

Regarding the timing, Khang explained that due to financial difficulties faced by businesses, the government extended the deadline for land rent payments until December 31, 2024. As a result, most eligible entities have yet to pay, meaning the reduction will be applied without complications. For those who have already paid, the amount will be credited toward future land rent obligations.

In response to concerns about future implementation, Khang stated that the government has sought the National Assembly Standing Committee’s approval to allow greater flexibility in determining land rent reductions from 2025 onward, based on prevailing economic conditions.

Vice Chairman of the National Assembly Vu Hong Thanh emphasized that reducing land rent plays a crucial role in supporting economic recovery and sustaining business operations.

The National Assembly Standing Committee has instructed the government to ensure that the proposed reductions are well-justified and legally compliant. The government is also required to address administrative challenges, including tax collection, refunds, and late payment penalties for eligible beneficiaries.

At the conclusion of the session, 100% of the committee members approved the 30% land rent reduction for 2024 and authorized the government to issue the corresponding decree.

Tran Thuong