Vietnam MPs argue against long land rent exemption in special economic zones

By Hoai Thu, Vo Hai, Bao Ha   May 29, 2018 | 11:14 pm PT
Vietnam MPs argue against long land rent exemption in special economic zones
Phu Quoc Island is one of Vietnam's proposed special economic zones. Photo by AFP
It goes ‘against the fundamental mechanisms of the market,’ a lawmaker says.

Several Vietnamese legislators disagree with a proposal to grant land rent exemption of up to 30 years to businesses setting up shop in the three special economic zones (SEZs) planned in the nation’s three main regions.

During a debate in the ongoing session of the National Assembly, they said the exemption would violate free market principles and undermine healthy competition.

Delegate Hoang Van Cuong said Monday that the rent exemption would be “against the fundamental mechanisms of the market,” and “could also undermine healthy competition between the zones.”

He also suggested that the land rent exemption be applied only during the “initial building phases.”

Meanwhile, delegate Le Cong Nhuong said the 30-year limit for land rent exemption was too high, and the zones could end up suffering financial losses if businesses went under before the land rent exemption period ran out.

In a previous session, MPs had debated whether the maximum land lease period for the three zones should be extended from 70 to 99 years.

Opponents argued strongly that the move would only benefit real estate investors and land speculators, not hi-tech businesses.

Vietnam plans to establish three SEZs, Van Don in the northern province of Quang Ninh, Bac Van Phong in the central province of Khanh Hoa, and Phu Quoc in the southern province of Kien Giang.

The Ministry of Planning and Investment estimates that the SEZs will be able to bring a total of $9.5 billion each year to the state coffers from tax payments and land related fees.

In 2030, the total number of jobs created in the three areas is expected to top 760,000, with an average annual income of $13,000, 5.4 times the current level.

The National Assembly is scheduled to vote on the proposal to develop the three special economic zones on June 15.

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