Why is Coi Market in Vinh City at risk of closure?
(Baonghean.vn) - Despite having existed for many years, Coi Market in Hung Loc commune (Vinh City) is facing the risk of closure because the management unit has submitted a request to return the land lease contract due to excessively high and unreasonable taxes. This is an "unusual" situation and could lead to many negative consequences if the market closes.
The land management unit submits a request to return the land.
Hung Loc Cooperative, the unit managing Coi Market, was established decades ago. Before 1998, it was called Hung Loc Agricultural Cooperative. Since 1998, it has been renamed Hung Loc Cooperative and has been granted a multi-sector business license by the State, including market management and operation. Currently, Hung Loc Cooperative has 750 members, mainly farmers and some small traders operating at Coi Market, and manages 178 hectares of agricultural land (excluding land reclaimed for projects).
Regarding the matterbuilding Coi MarketOn September 26, 2008, the Provincial People's Committee issued Decision 4213/QD-UBND.DT allowing the People's Committee of Hung Loc commune to select a site for the construction of Coi Market with a surveyed area of 8,638m².2By October 2009, the Provincial People's Committee had issued a Decision approving the detailed construction plan at a scale of 1/500 for an area of 8,638 square meters.2The total construction area of the building is 3,128m².2(construction density 36%). However, in 2009, due to issues related to investment capital and market management regulations, the People's Committee of Hung Loc commune submitted a proposal to the People's Committee of Vinh city regarding the transfer of investment, construction, and management of Coi market to Hung Loc Cooperative. In October 2009, the People's Committee of Vinh city agreed to this proposal.
In 2011, Hung Loc Cooperative mobilized capital contributions from small traders (who do business at the market) to invest in the construction of Coi Market, which has been in operation since 2012. The market has a total area of 6,777.5 square meters.2, but the construction area is only 2,750m²2This accounts for 40.5%. The remaining area is used for roads, sanitation facilities, fire fighting tanks, drainage ditches, etc.
Mr. Nguyen Van Hoa, Director of Hung Loc Cooperative, said: Coi Market was planned with 302 business locations, but currently only 265 are occupied. This is because after the Covid-19 pandemic, people's business habits changed; most people selling clothing and dry goods in the market have switched to online business. Therefore, the market management unit is facing many difficulties as nearly 65 business households have left their stalls to go elsewhere.
Amidst challenging business conditions, in 2022, Hung Loc Cooperative was granted a land lease by the Provincial People's Committee, with a lease price of 15,595,000 VND/m².2The land lease fee was then calculated at VND 1,268,341,350 per year (without any reduction in land rent). After being subjected to an excessively high land lease price, Hung Loc Cooperative submitted numerous proposals to the Provincial People's Committee and the Departments of Natural Resources and Environment and Finance regarding the adjustment of the land lease price at Coi Market. On September 23, 2022, the Provincial People's Committee issued Official Letter No. 7302/UBND-CN assigning the Department of Natural Resources and Environment to preside over and coordinate with the Department of Finance and other relevant agencies to consider the proposal of Hung Loc Cooperative. However, the Department of Natural Resources and Environment subsequently responded that the previously assessed price would remain unchanged.
Is there an inconsistency in the tax calculation method?
Upon further investigation, we learned that on December 20, 2019, the Provincial People's Committee issued Decision No. 57/2019/QD-UBND promulgating the land price list for Vinh City from January 1, 2020 to December 31, 2024. Notably, in this land price list, the Coi Market area and Le Viet Thuat Street have a price of 7.3 million VND/m².2However, in Decision 231/QD-UBND dated June 21, 2022, of the Provincial People's Committee approving the average land price for the land leased by Hung Loc Cooperative in Hung Loc, the price increased to 15,595,000 VND/m².2This is clearly a shortcoming, as Decision 231 deviates from Decision 57, which is currently in effect and has an applicable time limit.
Based on Decision 231, on April 14, 2023, the Department of Natural Resources and Environment, representing the Provincial People's Committee, signed a land lease contract with Hung Loc Cooperative, with a leased area of 6,777.5 square meters.2, with a unit price of 187,140 VND/m2.
It is worth noting that in the Decision on ranking markets in Vinh City issued in 2014, Coi Market was ranked as a Class 2 market and was only allowed to collect a maximum kiosk rental fee of 48,000 VND/m².2"In reality, the highest rental price is 48,000 VND/m²."2"Only a few kiosks on the street have good locations, while the kiosks inside the market have even lower rental prices," said Mr. Nguyen Van Hoa.
In particular, during our investigation of this issue, we obtained a price comparison table of land lease fees for Coi Market with Vinh University Market (Ben Thuy Market) and several cooperatives in the area, and found a significant difference. Specifically, Vinh University Market, managed by Ben Thuy Cooperative, has an area of 4,318.8m².2The rental price is 78,121 VND/m².2The total tax payable is 168,694,488 VND (after a 50% reduction in land rent); Dai Hue Cooperative, the unit managing the Dai Hue Plaza building at the beginning of Nguyen Phong Sac Street (Customs roundabout area), with an area of 4,009.7m².2, but the land lease price is only 104,518 VND/m².2The total annual tax payable is 209,543,000 VND (after a 50% reduction in land rent). Similarly, the Quyet Thang Cooperative rents 400 square meters of land.2Land for production and business in Team 5, also in Hung Loc commune, but the rental price is only 38,808 VND/m².2The total land rent is only 7,761,600 VND/m².2(Land rent has been reduced by 50%).
Meanwhile, Hung Loc Cooperative leased 6,777.5 square meters.2The land at Coi Market is charged a rental price of 187,140 VND/m².2And the total amount of tax payable is 1,268,341,350 VND/year (without any reduction in land rent). Notably, from 2021 onwards, when the Vinh Tax Department calculated the land rent for Coi Market, it was only about 140 million VND per year (after a 50% reduction in rent).
Mr. Nguyen Dang Thanh, Chairman of the People's Committee of Hung Loc commune, said: "Currently, the local authorities are aware of this matter and have been invited to attend the upcoming meeting of the Hung Loc Cooperative. Mr. Thanh himself believes that the land lease price at Coi Market as mentioned above is unreasonable. If the Hung Loc Cooperative returns the land lease contract and returns Coi Market, it will certainly create many problems, from which unit will replace management, to fire prevention and control, environmental sanitation, and many other issues that will be resolved…"
Clearly, with this method of calculating land rent, and the amount the management unit is allowed to collect from small traders (based on market rankings), even without advanced calculations, it's evident that the management unit will suffer significant losses. Therefore, the issue needs to be thoroughly considered to ensure a balance of interests between the State and businesses, and to safeguard the livelihoods of the people in this traditional market model.
