Phu Cuong Kien Giang Company Has Not Paid Over 46 Billion VND in Land Use Fees

The director of the Tax Department in Kien Giang province, Mr. Tran Van Dien, recently spoke with Business Today regarding Phu Cuong Kien Giang Joint Stock Company’s failure to pay over 46 billion VND in land use fees.

According to the tax department’s leadership in Kien Giang province, Phu Cuong Kien Giang Company is responsible for implementing BT31 project, which is part of the new urban area of Phu Cuong in Rach Gia city, Kien Giang province. This project was approved by the provincial People’s Committee on July 22, 2021.

On July 3, 2023, the Tax Department in Kien Giang province notified Phu Cuong Kien Giang Company to pay the land use conversion fee for the project, amounting to over 46 billion VND. However, the company believed that the tax amount was unreasonably high and did not correspond to the market value.

As a result, the company submitted a request to the provincial People’s Committee and relevant agencies to review and reconsider the land use conversion fee.

In response to the request, the provincial People’s Committee of Kien Giang issued an opinion on December 19, 2023, instructing the Department of Finance to lead and hire an independent consulting firm to reassess the land price. The provincial Tax Department was also granted the authority to suspend the financial obligations, as previously announced.

Mr. Dien stated that, following the issuance of the provincial People’s Committee’s document, the department canceled the notification to Phu Cuong Kien Giang Company to pay the land use fee.

“The price proposed by the consulting firm may have been too high. Although the appraisal council had reached an agreement, upon further investigation, it was found to be quite high. The investors were not making a profit, especially during these difficult times. Therefore, the provincial People’s Committee sent a document to the Tax Department, temporarily suspending debt collection measures against Phu Cuong Kien Giang Company. We are now waiting for the Department of Finance and the Department of Natural Resources and Environment to hire an independent consulting firm to reevaluate the land price,” Mr. Dien explained.

However, according to Mr. Dien, it has been challenging to find a consulting firm due to the current situation in Kien Giang and the whole country. “The prolonged process has had a significant impact on the tax sector. In recent days, the provincial People’s Committee has been directing relevant departments such as the Department of Finance and the Department of Natural Resources and Environment to expedite and resolve the issue decisively. We also want to resolve it to ensure revenue collection instead of leaving it in limbo. After the reassessment, the Department of Natural Resources and Environment canceled the information on price quotation, and the Tax Department also canceled the collection notice. Therefore, this case is not considered a tax debt issue or a violation of tax laws,” Mr. Dien added.

This is the first case of its kind in the province. Through multiple surveys, it has been recognized that the company’s request is justified, and the province is now considering it on a case-by-case basis, rather than automatically approving all requests.

In related news, the Kien Giang inspection team concluded its inspection on urban planning and construction implementation at the Department of Construction and the district and city People’s Committees in Kien Giang province on February 23, 2024.

According to the inspection team, Phu Cuong Kien Giang Company made partial adjustments to the land use plan in the BT31 area, which is part of the new urban area of Phu Cuong. However, the company has failed to submit the necessary paperwork to convert the land use purpose.

Business Today also learned that the Kien Giang inspection team identified irregularities in two other projects that violated land use conversion and misuse of land. These projects include the Truong Phat Driving Training and Examination Center (Rach Gia City) owned by Truong Phat Company Limited and the Kien Giang Motor Vehicle Inspection Center (Rach Gia City) owned by Doan Thinh Phu Company Limited.

Conclusion

The failure to pay land use fees by Phu Cuong Kien Giang Company highlights the challenges in determining the appropriate land prices. The provincial People’s Committee and relevant departments are working to address the issue promptly and effectively. The company’s request for a reassessment of the land price is viewed as reasonable, and the provincial government is considering it on an individual basis. This case serves as a lesson for other projects to ensure compliance with land use regulations and to avoid misuse of land.