First of all, as Lao Dong Newspaper has analyzed and predicted many times, one of the notable new points of Decree 71 is that land valuation will be issued by the Chairman of the People's Committee at the provincial and district levels, without having to go through the Standing Committee of the People's Council as before.
This change is a big step forward in increasing decentralization and delegation of power, which is very necessary and timely. However, the downside of this decentralization and delegation of power is the risk of leading to a state of fear of responsibility, not daring to decide, waiting or "looking to" other localities for reference.
In addition, decentralizing power to the chairmen of provincial and municipal People's Committees and districts in land valuation can lead to subjectivity and a "collective" mentality of the locality.
And reality has shown this, as the story that Mr. Pham Duc Toan - CEO of EZ Property Real Estate Investment and Development Joint Stock Company - shared on Lao Dong Newspaper: Before 2022, with a 10ha project, the enterprise had to pay about 100 billion VND in taxes. But now, the tax rate has increased to about 350 billion VND, even 500 billion VND.
Localities often set land prices based on data from transactions during the “hot” market. But up to now, although there are not many transactions, land prices are still kept high. This has pushed businesses into a situation where they do not dare to accept land or have to find ways to delay the land handover time.
Mr. Pham Duc Toan’s story reflects a common situation in many localities. Localities using data from the time of land “fever” to determine prices is the safest way for valuation agencies, to avoid being held responsible for losing the State budget. At the same time, this is also a way to increase revenue for local budgets.
However, whether it is increasing revenue or a safe solution, both are more or less unfair options, only benefiting the locality but causing damage to businesses and people. This also poses many risks to the real estate market.
Land valuation is a big issue, so it is understandable that Decree 71 encounters limitations and obstacles in the actual implementation process.
People and businesses hope that the authorities will soon summarize and clearly identify the problems of Decree 71 in order to absorb, update and adjust accordingly, creating a more complete legal corridor. How can the State, people and businesses harmonize their interests together?
