Poor land management causes State losses

Capacity limitations among State agencies involved in land management had led to significant State budget losses as well as land use inefficiencies, according to the State Audit of Vietnam (SAV).
An annual land management audit report issued by SAV revealed that 1.255 trillion dong (US$59.7 million) was added to State coffers from land use fees in 2009 – the highest in the last four years, representing 3 per cent of the year’s total revenue.

The sum was halved in 2010.

According to deputy director of SAV’s Department of General Affairs Tran Khanh Hoa, loose land management among State agencies was to blame. He said violations had occurred in land price assessments for taxation as well as the granting of exceptions and reductions in land use fees.

Wasteful use of land was also reported, with some localities using land improperly or allowing it to go fallow, said Vu Nhat Anh from the National Assembly Office’s Department of Economy and Budget.

In addition, the lack of transparency in the transfer of land use rights as well as in compensation for land clearance also contributed to State budget losses, he said.

Do Manh Hien from the General Department of Land Administration emphasised that the slow progress in implementing projects hindered economic development and reduced tax revenue.

Experts agreed that tax and fee policies were no longer appropriate to ensure efficient land management and use, as it caused land speculation and increased land prices.

Former deputy minister of Natural Resources and Environment Dang Hung Vo said there was a huge difference in the land prices set by the State and the market prices.

Regulations were needed to balance the prices, he said.

In addition, State revenue from land use fees was at risk of falling as land was gradually used up, Vo said. Doan Xuan Tien, Deputy State Auditor, said auditing played a significant role in promoting efficiency of land management and use.

However, capacity building among State agencies in managing land use was a decisive factor, he said.

Revenue from land is estimated to reach 60 trillion dong ($2.85 million) in 2011, about 11 per cent higher than last year.

Vietnam has more than 33 million hectares of land with nearly 9.4 million hectares of agricultural land and 11.6 million hectares of forest land.

Tags: Vietnam Property market, Vietnam property sector, vietnam real estate market