Land use fees decrease, projects lack capital

(Baonghean) - Up to now, in the province, land use fee collection has only reached over 163 billion VND/estimated 550 billion VND. Failure to meet the estimated progress has caused difficulties and pressure on the provincial budget to pay and invest in implementing basic construction investment projects and items.

Previously, Vinh City was the leading locality in the province in terms of land use fee collection, but in the first 6 months of 2013, the city only reached 51.16 billion VND (reaching more than 16% of the estimate), down 48% compared to the same period. Mr. Ha Thanh Tinh - Vice Chairman of Vinh City People's Committee said: "Vinh City's 2013 plan for land use fee collection is more than 319 billion VND, from now until the end of 2013, it must collect 268.44 billion VND according to the target. This is a very difficult and heavy task. Because the land use fee collection rate is low, the capital for basic construction investment faces many difficulties. From the beginning of 2013 until now, the city has only completed 8 projects, unfinished construction of 43 projects and is currently completing construction documents for 16 projects.

Real estate projects in Nghi Phu commune - Vinh city have not yet attracted investors.

The freezing of the real estate market has also seriously affected the land use fee revenue of localities in the whole province. In Dien Chau district, up to now, the land use fee revenue has only reached 3% of the estimate, Nam Dan 4% of the estimate, Nghi Loc 8% of the estimate, Con Cuong 12% of the estimate, Quy Hop 13% of the estimate, Cua Lo town 17% of the estimate... and only Thai Hoa town has reached 116% of the estimate (revenue of nearly 14 billion VND) and Yen Thanh district has reached 170% of the estimate (revenue of more than 42.5 billion VND).

Construction of drainage system renovation project in Ben Thuy ward - Vinh city.

It is known that the land use fee collection in the whole province has been over 163 billion VND, accordingly the provincial budget enjoys the equivalent of over 56.2 billion VND. It is expected that this year the provincial budget will have to spend 276,180 million VND from the land use fee source and to ensure that spending source, from now until the end of 2013, it is necessary to implement well the solutions for land use fee collection. Mr. Dang Thanh Tung - Head of the provincial budget department, Department of Finance said: "With the results of land use fee collection in the past 6 months, in the coming time, if we make good efforts in collecting land use fee, it is expected that by the end of the year it will only reach about 330 - 370 billion VND, accordingly the provincial budget will enjoy the equivalent of about 115 - 130 billion VND and thus will lead to an imbalance in development investment spending.

In that situation, the Department of Finance has proposed to the Provincial People's Committee a solution, that is, from July onwards, it will temporarily stop announcing investment capital in a number of project categories that are allocated investment capital from land use fees in the provincial budget and will not advise on solutions from the site clearance fund source, and wait until the land use fee collection reaches the corresponding amount, the Department of Finance will continue to announce capital. By the fourth quarter of 2003, if it is forecasted that by the end of the year, the land use fee collection will not reach the estimate, the Department will coordinate with the Department of Planning and Investment to report to the Provincial People's Committee to submit to the Standing Committee of the Provincial People's Council to adjust and reduce the basic construction investment capital that has been allocated investment capital from land use fees in the provincial budget and reduce the site clearance fund".

Faced with the reality of difficulties in land use fee revenue affecting the capital for basic construction investment, recently, on July 10, 2013, the Provincial People's Committee issued Decision No. 2913/QD-UBND promulgating the plan to implement Directive No. 09/CT-TTg of the Prime Minister on strengthening the direction and implementation of the financial and state budget tasks in 2013 and accordingly, the Provincial People's Committee assigned the Department of Finance to preside over and coordinate with relevant departments and branches to proactively balance the land use fee revenue for basic construction investment to enter the source on the budget and treasury management system according to the land use fee collection progress. If the land use fee revenue is reduced compared to the estimate, the implementation progress of the works and projects allocated from this revenue source will be reduced or delayed.

In order to meet the investment needs for basic construction projects using capital from land use fees, in the current difficult conditions, it is necessary to have appropriate solutions and flexible mechanisms and policies to "unblock" the real estate market.

Hoang Vinh