Contributions of IMG Chairman Le Tu Minh at the Conference to assess the situation and remove difficulties for the real estate market chaired by the Prime Minister
- Date Submitted: 08-08-2023
- Views: 67
At the conference to assess the situation and remove difficulties for the real estate market chaired by the Prime Minister, Chairman of the Board of Directors Le Tu Minh made many contributions with the desire to promote the real estate business and development market in Vietnam. The contributions were highly appreciated by experts in the real estate sector, realistic and objective, and are truly a remedy to help revive the business situation of the entire industry. Below, we would like to summarize some news from the press agencies.
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"Village customs" are very big in many places, it's okay not to do it and businesses are very miserable.
https://vtv.vn/kinh-te/chu-doanh-nghiep-bat-dong-san-le-lang-o-nhieu-noi-rat-to-20230803181013524.htm
In businesses, we assign tasks with deadlines, if officials miss the deadline without a valid reason and without the approval of their superiors to adjust, they will be fined or transferred to another job. However, it's okay if state officials are slow or don't do their work. We clearly understand that losses due to delays are greater than losses due to embezzlement.
Recommend quickly completing the legal system so that officials can work with peace of mind. There needs to be a clear decree on the decentralization of authority and responsibility of all levels, clearly stipulating: completed content, completion time, and responsibility if the deadline is exceeded.
Taxation to combat real estate speculation
https://vnexpress.net/doanh-nghiep-de-xuat-danh-thue-dat-luy-tien-de-ngan-dau-co-4637550.htmlThe Chairman of IMG Investment Joint Stock Company proposed to apply a 2% annual land tax rate and apply a progressive tax when the land is not put into business.
Explaining this, Mr. Minh cited that his company invested in a project in Australia, and had to pay a 2% land tax each year, about 700,000 - 800,000 USD before implementing the project. The land price is independently assessed by the tax authority each year. This year, the local government decided to increase this tax rate to 4%, which is very high.
According to Mr. Minh, if Vietnam implements this policy, only those who actually do projects will dare to hold the land, and when holding the land, the project must be implemented very quickly. This measure not only combats land speculation but also helps the Ministry of Finance have a large source of revenue.
We recommend that the Drafting Committee of the Land Law supplement and apply a 2% annual land tax rate and apply a progressive tax when land plots are not put into business or do not generate profits, as is being done in foreign countries.
“With a medium-term interest rate of over 10%, no economy can be healthy”
https://reatimes.vn/lai-suat-trung-han-tren-10-thi-khong-co-nen-kinh-te-khoe-20201224000021223.htmlWithin the framework of the conference, the IMG representative also thanked the State Bank for taking timely measures to stabilize the real estate market. However, according to Mr. Minh, the increase in interest rates should be time-limited and quantitative.
“It is time to reduce medium-term interest rates to below 10% because no economy is healthy with medium-term interest rates above 10%. Developed countries apply medium-term interest rates from 3 - 5%,” Mr. Le Tu Minh emphasized.
According to Mr. Minh, medium-term interest rates in Vietnam are high, and 5 - 6 months ago, they were around 12 - 14%, which led to businesses not wanting to borrow, not daring to borrow, customers losing confidence in the real estate market and they put their money into other areas.
Therefore, when making recommendations, Mr. Le Tu Minh suggested that medium-term interest rates should be lowered to around 8.5% plus or minus like 2 years ago, so that Vietnam can continue to be an Asian dragon. And the 12-month margin should be regulated to below 3%, because a margin of over 3% for 12 months will be very difficult for businesses.
'Real estate businesses should be banned from participating in banking to avoid creating economic monopolies'
https://1thegioi.vn/nen-cam-doanh-nghiep-bds-tham-gia-ngan-hang-tranh-tao-ra-tai-phiet-lung-doan-kinh-te-202947.html
https://dantri.com.vn/bat-dong-san/sep-dia-oc-hien-ke-giup-chong-dau-co-dat-chi-ra-tin-vui-cho-bds-du-lich-20230803210627519.htm
In addition, regarding the issue of “cross-ownership” between real estate enterprises and banks, Mr. Minh recommended that measures should be taken to prevent or restrict real estate enterprises from participating in banks and vice versa because enterprises participating in both fields mobilize social capital mainly for their own enterprises and have little effect on society, even creating tycoons who monopolize the economy.
Extend industrial land lease term to 70 years
https://www.vietnam.vn/3-van-de-lon-can-thi-truong-dat-nen-dan-ve-gia-tri-thuc-loat-du-an-nha-o-xa-hoi-cham-tien-do/
The company's leaders also proposed that the Ministry of Planning and Investment allow Vietnamese enterprises to apply Article 44.3 of the Investment Law and Article 126 of the Land Law, extend the land lease term or allow enterprises to pay land rent for 70 years so that industrial parks have sufficient term length and are attractive enough to land lessees. This is both in accordance with the law and increases local revenue.
