Small traders at Phong Toan market reported to Nghe An Newspaper about the current situation of the market being deserted and sluggish for many years, thus facing difficulties in fulfilling their tax obligations to the State. To find out the reality, we went to the market many times before talking to the small traders here.
At 4:30 p.m. on September 20, 2022, right at the gate of this market (located at 10 Ly Tu Trong Street, Ha Huy Tap Ward, Vinh City), what caught our eyes was the signboard with the name of the market with some letters falling off, making the name "Phong Toan" look lame, the paint color was old. At the time near the end of the afternoon, in other markets in the city, it is usually the peak time for people to come and buy and sell. But at Phong Toan market, there were only a few people passing by, which could be counted on the fingers; it felt like the owners of the stalls were doing more business than the customers!…
Inside the main hall of the market, the stairs leading to the second floor were blocked by a clothes rack from the kiosk right next to it, and all the kiosks on the second floor were out of operation. On the first floor, there were only four kiosks selling popular goods such as clothes, shoes, hats, etc. The remaining kiosks were locked, or fenced off and abandoned. The tiled floors were peeling and broken in many places. The corners were filled with trash, or damaged packaging, buckets and pots were strewn about.
Ms. Doan Thi Nga - a small trader said that for a long time, the first floor of the main hall only had 4 kiosks open for sale. She took us to visit her stall selling spices, onions and garlic located in the area next to the main hall of the market. Ms. Nga's chili, along with other "grocery" stalls, is located on the east side of the 2-storey hall. It was past 5 pm but there were only a few people passing by, the stall owners entertained themselves by sitting and playing on their phones, or huddled together to chat.
Ms. Vo Thi Phuong, who has a stall right next to Ms. Nga's stall, said that she bought a kiosk to sell goods at Phong Toan market more than ten years ago. Only the first few years of business were good, then the customers gradually decreased... This is also the general situation of the entire kiosk area east of the main hall of Phong Toan market; and the number of kiosks still operating is less than the number that has closed, or has signs "stalls for rent", "stalls for sale"... Opposite the row of stalls next to the hall is the area selling vegetables and food such as fish, meat and fast food, which is also in a similar situation with many "sitting spots" left empty, or becoming places to store packaging equipment, to park motorbikes and bicycles, or to collect garbage. In addition to the main 2-storey hall area, there are also stalls arranged in order on the concrete floor planned to sell goods such as vegetables, fruits, fish and shrimp, and customers are equally sparse.
…Many days later, we went to Phong Toan market many times and found that in the morning around 7-9am, the number of buyers and sellers here was larger than in the afternoon, but only slightly larger.
“There are fewer and fewer customers. In addition to saving up to pay off the bank loan to buy a stall that we have not yet paid off, we now have to pay more than 20 million VND in land rent tax each year, so we are at risk of having to leave the market,” said Ms. Vo Thi Phuong, a small trader with a stall near the main gate of Phong Toan market. This is also the opinion of 30 small traders who submitted a petition to Nghe An Newspaper and relevant levels and sectors at the end of August 2022. The content of the petition stated “requesting a reduction in land rent tax at the new Phong Toan market”.
In the petition, the small traders stated: "In April 2022, we were notified to pay land rent tax to the State at a rate of 179,400 VND/m2.2, equivalent to Phong Toan Cooperative having to pay nearly 1.2 billion VND in land rent each year. The market management board has divided and notified shareholders with different levels of payment for each household, some shareholders have to pay more than 22 million VND/year/station, some people have 2-3 stations, the tax is nearly 40 million VND/year such as station number 29, station number 140, 195... The obligation to pay tax to the State is the responsibility of business people. However, due to ineffective business, we respectfully request the People's Committee of Nghe An province and relevant departments to consider reducing land rent tax for the market and for small traders. When the market operates effectively, we commit to fulfilling all tax obligations to the State".
Ms. Tran Thi Huong - Director of Phong Toan Cooperative confirmed that there were small traders who expressed their wish to reduce land rent. The Cooperative Management Board also agreed with the wishes of the shareholders, and twice submitted a request to the authorities to consider reducing land rent for Phong Toan Cooperative.
Ms. Huong added that Phong Toan Cooperative (owner of Phong Toan market) was assigned by Vinh City People's Committee to manage investment, business and market exploitation since April 1, 2009. After being transferred from Ha Huy Tap Ward People's Committee, Phong Toan Cooperative invested in 2009, with a total investment of 21 billion VND from the capital contributed by cooperative members and small traders doing business at the market with a scale of 2 solid floors, 400 business stalls, equivalent to 3,157.96m2/6,678.2m2" Land planned for market construction. After 10 years of land rent exemption, on December 31, 2021, Nghe An Provincial People's Committee issued Decision No. 635/QD-UBND on leasing land to Phong Toan Cooperative in Ha Huy Tap Ward. On April 14, 2022, Nghe An Provincial People's Committee authorized the Department of Natural Resources and Environment to sign Land Lease Contract No. 55/HD-TD with Phong Toan Cooperative. The Department of Natural Resources and Environment issued Notice No. 103/STNMT-VPĐKĐĐ on granting certificates of land use rights, ownership rights, houses and assets attached to land to Phong Toan Cooperative to use land in Ha Huy Tap Ward, with a term of use until December 31, 2071, the origin of agricultural land managed by the cooperative.
Phong Toan Market is designed with 2 floors, solid quality, planned to arrange 400 locations, business booths with a usable area of 3,157.96m22, after construction was completed, it has been in operation since 2011. “From the beginning, it only reached 25-30% of the design and the trend is that more and more households have stopped doing business. From 2013 until now, the entire main hall on the 2nd floor with 89 stalls is not operating. Currently, the main hall on the 1st floor has only 06/44 stalls operating, the main hall on the 2nd floor has 89 stalls, all of which are closed; the pavilion selling food and fruit has 03/58 stalls operating; the auxiliary pavilion selling poultry and fresh goods has 20/60 stalls operating; around the market there are 13/91 stalls operating”, Ms. Tran Thi Huong said…
According to Ms. Tran Thi Huong, after the Notice No. 4561/TB-CCT on land rent payment from Vinh City Tax Department sent to Phong Toan Cooperative on April 21, 2022, many business owners have not paid because they think that the Cooperative has allocated the tax amount to the shops unreasonably; in addition, the land rent is too high.
In contact with reporters, a landowner explained: “Many households only have to pay 2-3 million VND/year, but some have to pay 20-30 million VND/year. While the State announced the tax rate is only nearly 180 thousand VND/m2. After the notice of land rent collection, the Cooperative held a meeting of shareholders to announce the tax balance. At the shareholders' meeting in May 2022, the Cooperative Management Board proposed a specific tax rate, the highest paying household was more than 10 million VND/year; the lowest household was about 1-1.5 million VND/year, we all agreed. But after the meeting, the Management Board sent a notice to the stall owners with a balance of the amount to be paid for each stall that was far different from the level agreed upon at the previous shareholders' meeting. Even for my stall, the tax rate proposed by the Management Board was 20 million VND/year, not more than 10 million VND/year as before.
Thus, the reason why many small traders have not paid taxes is because there is no consensus between the Cooperative Management Board and the traders. Explaining the adjustment of the tax amount, Ms. Tran Thi Huong said: “Regarding the land rent of nearly 1.2 billion VND/year, our Management Board has relied on the advantageous location of the business booths to allocate the amount to each booth owner. Households with booths located on main roads such as Ly Tu Trong Street, Nguyen Nang Tinh Street, or with convenient frontage locations, closer to the road, pay more land rent than booths with hidden locations, locations at the back entrance or inside the communal house. The amount that the Management Board announced at the shareholders' meeting was due to an accounting error. After the meeting, the Management Board rebalanced it” (regarding the reason given by Ms. Huong when talking to us as “accounting error”, the Management Board of Phong Toan Cooperative has not yet explained this “mistake”, or propagated it to small traders to understand, causing suspicion and comparison in the allocation of the amount that households have to pay).
It is reasonable for the Phong Toan Cooperative Management Board to base on the favorable locations of the booths to allocate tax amounts at different levels. However, to avoid confusion and disagreement leading to late tax payment, the Phong Toan Cooperative Management Board needs to organize shareholder meetings, or have more democratic and frank exchanges and discussions to publicly analyze and agree on revenue and expenditure plans, resolve concerns, and create consensus between the management board and members. This is also necessary to work together to overcome difficulties, find solutions to improve business efficiency, and keep up with the trends and development rules of the market, in line with the spirit of the Cooperative Economic Forum recently organized by the Government.
The 2022 Cooperative and Economic Forum took place on September 23. Here, leaders of the Government as well as localities, including Nghe An, pointed out the shortcomings and limitations in the collective economic sector and said that the reason for the slow development of this sector is due to the slow digital transformation and lack of specific strategies and actions. Therefore, the cooperative and economic sectors must proactively change their fundamental production and business methods, and digital transformation to adapt to the new development situation is an urgent and irreversible requirement. To do so, the core issue is to change the awareness of cooperative members.
Thus, at Phong Toan market, for traders as well as the Management Board, instead of asking for tax reduction due to ineffective business, first of all, there needs to be consensus, proactive change, finding appropriate solutions to increase revenue, promptly meeting the inevitable requirements of the market. On the other hand, the issue of whether to reduce taxes and adjust land rental prices at Phong Toan market also needs to be in accordance with the regulations on policies and laws of the State, following the guidance and consideration of competent organizations and agencies.
