Thông báo 12/TB-UBND

ANNOUNCEMENT

ON FEEDBACK FOR THE GOVERNMENT INSPECTORATE’S CONCLUSIVE ANNOUNCEMENT ON THE COMPLIANCE WITH LAWS ON INSPECTION, COMPLAINTS, DENUNCIATION, CORRUPTION PREVENTION AND COMBAT, AND A NUMBER OF INVESTMENT PROJECTS RELATING TO LAND MANAGEMENT AND USE IN DA NANG CITY

In the afternoon of January 17, 2013, the Government Inspectorate publicized the Announcement No. 160/TB-TTCP of January 17, 2019, on conclusions in inspection on the responsibility of the Chairman of the Da Nang People's Committee in the compliance with laws on inspection, complaints, denunciation, corruption prevention and combat, and inspection of a number of investment projects relating to land management and use, and the Vietnam Television also informed the full of above conclusions in the main news of VTV1 at 7:00 PM of January 17, 2013.

Regarding these conclusions, the Da Nang People’s Committee has feedback as follows:

I. FOR ELABORATION OF LAND ZONNING AND USE PLANS:

All projects which the Government Inspectorate have conducted inspection are implemented in accordance with land use zoning have been approved by the Prime Minister at the Decision No. 503/QD-TTg of May 31, 2000, the Decision No. 465/QD-TTg of June 17, 2002, the Resolution No. 11/2006/NQ-CP of May 26, 2006, the Resolution No. 41/2007/NQ-CP of July 31, 2007; are promulgated in annual land use plans by the city People's Committee.

The master plan of Da Nang city have been elaborated with participation of foreign and domestic design and consulting organizations with experiences, which contribute in Da Nang’s zoning elaboration to be larger, and anticipate the development general trend. Da Nang has had a master plan which is a step ahead, with an invested-synchronously infrastructures, thus investors see that Da Nang is a attractive destination. Practically, the city has very many projects which have been carried out and put into use, so the city’s urban areas are more and more spacious and modern as today. Going along with the zoning work, the city has concentrated on premises clearance in a wide area in order to create many land funds in service of resettlement arrangement for people in clearance areas helping them to have a life better than life in their old residence. (This way has created consensus and support of all people classes for the city’s guidelines). The remaining land fund under the plan, the city has and shall continue calling investment, organizing land use right auction as prescribed aiming to create revenue in order to spend on development investment. The profuse land fund source has created a suitable land price, the people are enjoyed benefits on social security, the investors have condition to approach and invest in projects with feasibility.

However, because the economic situation is facing many difficulties, some projects have not yet carried out. The city shall urge investors to carry out projects sooner.

So that, the Government Inspectorate’s conclusions with content as “the elaboration of land zoning and use plans is lack grounds and basis, not suitable with the local socio-economic development and actual demand. Situation of land which is fallow after being leveled, cleared, transfered or leased land use right, is large, and there are not many investment projects having been performed” are conclusions with insufficient grounds.

II. FOR AUCTION AND HANDING OF LAND USE RIGHT:

Da Nang People’s Committee affirms that all cases of handing land for organizations, individuals are publicized in land use right auction and transfer in accordance with laws on land at the performed time, specifying:

- The Government's Decree No. 181/2004/ND-CP of October 29, 2004, guiding implementation of the Land Law;

- The Government's Decree No. 17/2006/ND-CP of January 27, 2006, amending and supplementing a number of articles of Decrees guiding implementation of the Land Law and the Decree No. 187/2004/ND-CP on conversion of state owned companies into shareholding companies;

- The Decision No. 216/2005/QD-TTg of August 31, 2005, of the Prime Minister, on auction of land use right;

The auctions of land use right are publicized on press by units, they are ensured to be right with time and contents as prescribed: Places of construction, requirements of zoning architecture, land area, unit price, land use purpose, time and location of registration, etc, for investors to have information of auction registration.

So that, the Government Inspectorate’s conclusions with content as: "The auctions of land use right, which had been carried out by Da Nang People’s Committee in last years, are not well, from the stage of promulgation of auction regulation to the stage of implementation do not comply with regulations of the Land Law and the Decision No. 216/2005/QD-TTg of the Prime Minister. Rate of successful auctions is too low, not create an equal and objective market upon transferring the land use right in order to collect amounts for the State budget… Situation of handing land which not performed through auctions is still popular and make the land prices of land use levy collection not be very close to the prices of land use right transfer in the market, facilitating for a few of investors to speculate and collect benefit” are conclusions with insufficient grounds.

III. THE SIGNING OF CONTRACTS OF LAND USE RIGHT TRANSFER:

In furtherance of program on administrative procedure reform, aiming to facilitate for investors, organizations and citizens in contacting with state agencies when doing procedures of land receipt, land use levy payment, etc, according to guideline of the city People’s Committee, and based on the realities of localities, (Because the problem of compensation and clearance are implemented in a wide area, the pressure from solving damage compensation, resettlement, management of revenue source is very big) hence after having guides for handing land specified in writing by the city People’s Committee, the city has assigned units to sign contracts of land use right transfer. This guideline has been implemented in many last years and attained much effectiveness in state management of land (handing land, management of implementation of land financial obligations, duties between state and organizations, individuals being assigned land), brought very big effectiveness in social aspect and kept firmly investment environment, which comprise: These units implement all necessary procedures in accordance with regulation. Organizations, individuals contact with only one unit in order to do procedures from clearance, compensation, handing land, paying levy land, grant of land use right certificate, etc. These units have operation function as an one-stop Team according to the city’s current process on administrative procedure reform while resolving work of people, organizations.

All cases of being assigned land, persons who are assigned the land use right must pay 100% levy, if they debt in spite of only 1 dong, they shall not be granted certificate of land use right. When possessing land use right certificate, the land user may transfer as prescribed by law. This issue not in powers and duties of the city People’s Committee.

This way of the city is arisen from the objective demand and realities of localities, responsibilities of state agencies with people, program on administrative procedure reform, and has promoted effectiveness, contributed a very big part for success of compensation, clearance, resettlement, implemented well administrative procedure reform, create very big consensus of people, kept firmly investment environment (this is an important element for Da Nang to be ranked high of 3 years ranked 2, 3 years at the lead position of whole country on provincial competition index PCI and at the lead of whole country on public administrative procedures according to assessment of Ministry of Internal Affairs published in May 2012).

So that, the Government Inspectorate’s conclusions with content as: "This is the basic reason leading to arise many mistakes such as: There are not sufficient grounds, basis to define land price to collect land use levy; the approval of construction detailing plans and approval of adjustment of approved detailing plans are arbitrary; many investors have not implemented investment after signing contracts of land use right transfer, being granted certificate of the land use right, and continue to transfer for other investors and get differences with a big amounts, causing loss of revenues for the State budget, causing big economic damages” are conclusions with insufficient grounds.

IV. FOR THE GOVERNMENT INSPECTORATE'S CONCLUSION ON CAUSING LOSS FOR 6 PROJECTS

The Government Inspectorate has inspected 46 projects, in which, for some projects, the Government Inspectorate has taken land price of the city land price appraisal Council as main basis for comparison with the land prices which are decided by the city People’s Committee and have differences, and not calculated construction density when defining land prices, then concludes on causing loss, which have no grounds.

As prescribed, approval of land prices in order to collect land use levy is in competence of the city People’s Committee. The city council of land price appraisal is established by the city People’s Committee, it including representatives of the Service of Finance, the Service of Natural Resource and Environment, the Service of Construction and the city Tax Department, the Office of city People’s Committee is only a division in charge of consulting and proposing to leaders of the city People’s Committee for consideration and decision on land prices.

Due to this thing, the acceptance for reduction, increasing or keeping intact of land prices at the request of the city council of land price appraisal is a normal work and under competence of the city People’s Committee.

The specific land prices which are defined by the city People’s Committee are suitable with each planed position and location, conditions on infrastructure, calculation of coefficients as prescribed as: concealing coefficients, coefficients of three-way crossroad, four-way crossroad, coefficients of getting three fronts or more, etc; classifying the depth of land lot, market land prices in that location at the time and all land lots are brought to auction publicly. Defining prices of large land lots must calculate construction density, which often is between 60% and 70% in comparison with the area of land zone. The reality shows that there are some land lots with depth of hundreds meter, and area of several hectares to dozens of hectares. When applying the method to define land prices according to regulation of Government, guides of the Ministry of Finance, the land prices may be lower than the land price table prescribed by the city People’s Committee. This is of course because the price table prescribed by the city People’s Committee is applied for the small land lots with area of about 100 m2, construction density of 100%, and full infrastructure.

For this problem, the Ministry of Finance gave opinion at point 1 and point 3 of the Official Dispatch No. 11021/BTC-QLCS on August 16, 2012, specified as follows:

- “The implementation of provincial inter-branch council of land price appraisal which based on the annual land price table and methods of price determination as prescribed by law (the Decree No. 198/2004/ND-CP of December 3, 2004, the Decree No. 188/2004/ND-CP of November 16, 2004, the Decree No. 123/2007/ND-CP of July 27, 2007 of the Government and guiding Circulars) to define specific land prices for calculation to collect land use levy, and submit them to the provincial People’s Committee for decision, is exact with regulation on competence of deciding land prices for calculation to collect land use levy”.

- “Construction density under the detailed construction plans having been approved is one of grounds to define the land prices for calculation to collect land use levy.”

Separately for this problem, the Central Inspection Committee had very specific conclusions at item 4 of the Conclusion No. 94, of April 25, 2007 of the Central Inspection Committee:

“The sale of the area of 18,000 m² at the end of Pham Van Dong road, Phuoc My ward, Son Tra district, the Vinh Trung mall, the area in 8 Phan Chau Trinh, the quadrilateral area Pham Hong Thai – Nguyen Chi Thanh – Nguyen Thai Hoc – Yen Bai, the areas sold for Mr. Nguyen Huu Sinh, Mr. Nguyen Huu Binh, the Duc Manh Limited Liability Company, Trung Nguyen Coffee Limited Liability Company, Dong A An Cu Company. After considering, the Central Inspection Committee of Party realizes that the sale of above areas has guideline of the parts of Da Nang People’s Committee in order to implement for purpose of trade and tourist, not under dwelling house prices, the construction density of buildings is between 50% and 60% of the area of land zone. The remaining area is in service for public. So that, it cannot compare between the land prices for service in accordance with the city’s plans with the land prices of foundation land sale or the land prices of the facade positions on main streets.”

* In each specific project:

1. The project of Phuc Thien Long Company:

On the basis of proposal of the city land price appraisal Committee, the city People’s Committee has approved the reserve price of 2,570,000 dong/m² for auction of the land lot.

After publicizing auction in accordance with regulation of law, upon expiry the above time limit, there is no organization or individual participating in auction and there is only the Phuc Thien Long Company requesting to receive the land use right. The leaders of city People’s Committee unified that the guideline of assigning land for Phuc Thien Long Company is conformable with provisions in point d clause 5 Article 2 of the Government's Decree No. 17/2006/ND-CP of January 27, 2006, amending and supplementing a number of articles of the Decree No. 181/2004/ND-CP guiding implementation of Land Law;

Regarding the unit price to assign the land-use right for the Phuc Thien Long company, the city People’s Committee unified to approve the land price to assign the land-use right according to the proposal of the city Committee of land price appraisal with the unit price of 3,030,000 dong/m² (it is higher than 1.2 times of unit price approved for auction). The approval of the unit price of 3,030,000 dong/m2 is right with competence of the city People’s Committee, and conformable with the market price at that time.

Reasons of not re-defining the land prices and allowing Phuc Thien Long Company to be prolonged time of land use levy payment are:

- After signing the contract of land use right transfer to Phuc Thien Long Company, real estate situation of whole country in generally and of Da Nang city was decreased and frozen, concurrently, banks almost refused to supply loans for investment in real estate; hence the finance of enterprises met many difficulties.

- Because this area have origin from national defense land, the process of procedures for transfer from national defense land into land for social-economic development is prolonged, and the system of technical infrastructure in the area has not yet been invested synchronously due to the problem of defense land, this make the city cannot hand entire premises of project to investor for carrying out the project.

- From December 2007 to September 2009 (from time of deciding land price to time of paying the land use levy by the company), the land price tables in 2008 and 2009 in Da Nang city had had no change; the real estate market had been decreased and frozen, inflation had lasted. At this time, the storm number 6 had just come in Da Nang city and destroyed many houses, construction works at coastal areas which caused psychology to be afraid of investment in coastal areas. So that, the land prices in coastal areas in this duration had been decreased. On the other hand, this area near by the Nuoc Man airport, many people are afraid that the dioxin waste in the preceding time in the airport are still remained, and affect to healthy; the area of villas along to fence of Nuoc Man airport, adjacent this area had been reduced price for many times, often advertised on mass media but in many consecutive years, there is no client contacting for receipt of the land use right.

If calculating under the market price of land use right transfer at time of 2009 (applying the 2009 land price table promulgated by the city People’s Committee) the average unit price of all area is 2,691,319 dong/m². So that, the price to assign the land use right for Phuc Thien Long company is higher than 338,681 dong/m² in comparison with the market unit price at that time (3,030,000 dong/m² – 2,691,319 dong/m²) in the land price frame prescribed by the Government.

* Regarding transfer among organizations, individuals:

Clause 2 Article 3 of the Government’s Decree No. 188/2004/ND-CP of November 16, 2004, on method to define land prices and price frame of land types, prescribes:

“The actual market price of land use right transfer under normal conditions means the amount of VNdong calculated on a land acreage unit formulated from the results of common actual transactions between people who wish to transfer and people who wish to be transferred without being affected by such factors as price rise due to accumulation, change of planning, transfer under conditions of coercion, blood relations”.

The city People’s Committee affirms that the unit prices of land use right transfer of individuals, organizations for this area are not market price under normal conditions, because:

- After the Phuc Thien Long Limited Liability Company had been allowed to transfer name of land owner for Mr. Nguyen Huu Binh. After finishing the financial obligation and being granted the certificate of use right, Mr. Nguyen Van Binh transferred for ATS Company (Director is Ms. Nguyen Thi Thoa). Ms. Thoa and Mr.Binh are siblings (having blood relationship).

- This transaction is not common, but in reality, it proved that the increasing of land price upon transferring land use right of above individuals aims to increase too high fictitious value of land use right transfer in order to borrow loans of banks with big amounts (This is actual situation which leading to bad debts in banks at present).

- Apart from purpose of increasing fictitious value as mentioned above, transfer of land use right among individuals, organizations is civil relationship among parties, contracts had been certified by the notary agencies, names of owners have been changed and registered as prescribed by law. This issue not in powers and duties of the city People’s Committee.

So that, the Government Inspectorate’s conclusion with content as: “The land area which had been transferred for Phuc Thien Long Company in order to construct a trade and tourist service zone had been defined price of land use right transfer in 2007 by the city People’s Committee, passed 4 times of extension for payment time, until September 2009, the Company had just paid land use levy but the city did not re-define price (causing loss of 120,172 million dong), then the investor transferred immediately for other partner and got a profit of 498,442,203 million dong” is a conclusion with insufficient grounds.

2. The Southern land area at the end of Pham Van Dong road assigned for Mr. Hoang Hai and Ms. Trung Thi Lam Ngoc (21,000 m²):

* The Government Inspectorate has opinion:

“The Southern land area at the end of Pham Van Dong road. In 2006, the city People’s Committee transferred it for Mr. Hoang Hai and Ms. Trung Thi Lam Ngoc, with total contract value of 84 billion dong. In 2008, Mr. Hai and Ms. Ngoc failed to carry out project, and authorized for Mr. Phan Van Anh Vu to transfer it for Mr. Pham Dang Quan with the transfer price of 581,526 billion dong (collecting difference of 495,374 billion dong). In 2009, Mr. Pham Dang Quan continued to transfer it for the Phuong Trang automobile - real estate investment joint-stock company with the price of 585 billion dong. Actual state of the land area is still vacant, have not yet been invested”.

* For this content, the city People’s Committee has feedback:

- Mr.Phan Van Anh Vu is person who implemented transfer of land use right for Mr.Hai and Ms. Ngoc according to the authorization contract; he is not person who received the land use right from Mr.Hai and Ms. Ngoc.

- Mr. Pham Dang Quan is Director General of the Phuong Trang automobile - real estate investment joint-stock company. So that, Mr. Quan is not other than this company. This issue shows that unit price of land use right transfer between these organization and individual is not market price under normal conditions;

- The transfers of land use right among individuals, organizations mentioned above are civil relationship among parties, contracts had been certified by the notary agencies, names of owners have been changed and registered as prescribed by law. This issue not in powers and duties of the city People’s Committee.

However, through the reality of real estate market in city, it have happened many cases which organizations, individuals increased too high fictitious value of land use right transfer in order to borrow loans of banks with big amounts but in actual market the value is not at that price and lower than very much. In reality, it has happened bad debts in banks as situation at present.

3. Area A2, A3, at the head of Son Tra – Dien Ngoc route:

* For land use right transfers of individuals creating big differences. * For this problem, the city People’s Committee has feedback:

Clause 2 Article 3 of the Government’s Decree No. 188/2004/ND-CP of November 16, 2004, on method to define land prices and price frame of land types, prescribes:

 “The actual market price of land use right transfer under normal conditions means the amount of VNdong calculated on a land acreage unit formulated from the results of common actual transactions between people who wish to transfer and people who wish to be transferred without being affected by such factors as price rise due to accumulation, change of planning, transfer under conditions of coercion, blood relations”.

The city People’s Committee affirms that the unit prices of land use right transfer of individuals for this area are not market prices under normal conditions because:

After finishing the financial obligation, Ms. Pham Thi Dong transfer (the area of A3) for Ms. Truong Thi Chi, Ms. Le Thuy Huong. Ms Dong and two persons have relation in a family and have business relation with together,...

The area of A2, of which use right was assigned for Ms. Pham Thi Dong, granted certificate of land use right number AP986789, of November 04, 2009, by the People’s Committee of Son Tra district. Then, Ms. Dong has transferred it for Ms. Nguyen Thi Xuan and contract has been certified by the notary agency as prescribed.

The area of A3, after being granted certificate of land use right, Ms. Truong Thi Chi and Ms. Le Thuy Huong transferred it for Mr. Truong Dinh Trung. And after that, Mr. Truong Dinh Trung transferred it for the Phuong Trang real estate joint-stock company (Mr. Trung is Deputy Director of Phuong Trang real estate joint-stock company). Because Mr. Trung and Phuong Trang real estate joint-stock company have relation, share same rights and benefits, they increased fictitious value of the area in order to borrow loan of banks with big amounts but in actual market the value is not at that price and lower than very much. In reality, it has happened bad debts in banks as situation at present. So that, the prices of land use right transfer of this area are not market prices under normal conditions as prescribed.

Apart from purpose of increasing fictitious value as mentioned above, transfers of land use right among individuals, organizations are civil relationship among parties, contracts had been certified by the notary agencies as prescribed by law. This issue not in powers and duties of the city People’s Committee.

4. The area assigned for Tan Cuong Thanh Company:

* The Government Inspectorate’s conclusion with content as:

“The area which was changed purpose of land use by Tan Cuong Thanh company, was calculated with a price lower than 67,323,064 million dong the price prescribed by the city” is a conclusion with insufficient grounds because:

Is is considered that this area is near Phuoc Tuong hills and mountains, infrastructure has not yet been invested, Hoang Van Thai road has not yet been invested for upgrading and expansion, the rural residential area is scattered, near by area exploiting soil, stone, near by Khanh Son landfill which make environment to be influenced, the city People’s Committee have approved unit price of land for business and production purpose being 410,000 dong/m2. After Tan Cuong Thanh Company had suggested changing purpose of land use from land for production and business into rural residential land, the city council of land price appraisal proposed price for change purpose of land use of this area being 175,800 dong/m². The city People’s Committee decided in accordance with the above-mentioned proposal of the land price appraisal council.

According to that, the price of rural residential land which was assigned for Tan Cuong Thanh Company is 585,800 dong/m² (410,000 dong/m² +175,800 dong/m²) and right with competence and conformable with market price at that time, with consideration of change of land use purpose under condition which this company must pay funding for moving production establishment as actual state (the city had not paid compensation for workshops, architectural objects, support for moving equipment, investment in infrastructure, ground leveling, etc) in according to the guideline of the city People’s Committee at the official dispatch No. 4865/VP-QLDTh of November 25, 2010. This unit price is in the land price frame prescribed by the Government.

5. Two areas A4, A5, at the head area of Son Tra – Dien Ngoc route assigned for Phu My Company:

* The Government Inspectorate’s conclusions with content as: “Areas A4, A5 (residential areas at the head of Son Tra – Dien Ngoc route). In 2007, these areas were transferred for the Phu My Trading and Construction joint-stock company in service for construction of apartment buildings, high-grade apartments, offices for lease and tourist hotels, leaders of the city People’s Committee and People’s Council did not define under the residential land price but kept intact price under the production and business land price (equal 0.7 residential land price) which caused loss for budget. Till 2010, the Phu My Trading and Construction joint-stock company transferred these areas for Phuong Trang real estate Company with amounts of 285,645,920,000 dong. The difference in comparison with the price defined by the city in 2007 is 22,680,432,000 dong" is conclusion with insufficient grounds because:

The City Council of land price appraisal had proposed the reserve price level for land auction with non-agricultural – production and business purpose being 2,570,000 dong/m2 which were decided by the city People’s Committee under the proper unit price as mentioned above.

After auction had been published on newspaper as prescribed by law, but after the provided time limit had been expired, there was no organization or individual participating in auction and there was only the Phu My Trading and Construction joint-stock company which applying for receipt of land use right and being unified by the city People’s Committee to assign the land use right of two areas A4, A5 with the unit price of non-agricultural-production and business land of 2,570,000 dong/m².

After this company had paid all land use levy of two areas and had been granted the land use right certificate by the city People’s Committee. According to the certificate which had been granted for Phu My Company (Number AK280458 and AK280459), the use purpose of these areas is non-agricultural – production and business land.

So the city People’s Committee collected the land use levy from Phu My Company for production and business land, not for residential land like as the opinion of the Government Inspectorate.

6. The urban area and Da Phuoc Golf course project:

* The Government Inspectorate concludes: “The area of 29ha in the Da Phuoc golf course project was assigned for the joint stock company 79 with a price lower than the price stipulated by the city and created benefit of 570,826,323 million dong for the joint stock company 79”, this is a conclusion with insufficient grounds because:

On November 16, 2006, Cantavil Daewon Limited Liability Company and Da Nang People’s Committee signed a principle agreement on investment in the compound urban area and Da Phuoc golf course project, specifying on the basis of the price to collect water surface levy which was unified previously consisting of 300,000 dong/m2 and unit price to collect land rents being USD 0.1 m²/year. Assigning the land use right with area of about 29 ha, unit price of 300,000 dong/m² for a Vietnamese company joining venture with Daewon Company was stated in this principle agreement.

In this project, because the state assign water surface for investors and investors must spend out 100% cost for doing embankment, ground leveling, collecting land use levy with price of 300,000 dong/m2 of the city is suitable with the market price at that time.

The unit price of 300,000 dong/m2 of water surface under a condition which the investors must handing over for the city an area of 25 ha which is perfected infrastructure in the Da Phuoc urban area with cost of about USD 5 million, in which the city may build a public interest area. According to the current land price of the city, the value of this 25ha area is 955 billion dong.

So for the 29ha area, beside the unit price of assigning water surface being 300,000 dong/m2, the value attaining from the above-mentioned 25ha area has been allocated for the 29ha area, hence the land use levy of 1m2 is 3,407,000 dong/m² (988 billion/ 29ha).

The city People’s Committee affirms that the land price to assign for Daewon Company is water surface price. Beside that, in reality, collection of land use levy for 1 m2 of the 29ha area is 3,707,000 dong/m2 (3,407,000 dong/m2 + 300,000 dong/m2). This is unit price of land levy which in reality the city attained benefit with the 29ha area which was assigned for Daewon Company together with its partner being Vietnamese enterprise.

Actually, the city collected and attained benefit of 1,075 billion dong (988 billion dong + 87 billion dong), specifying: 955 billion is amounts attained from 25ha and 87 billion is the water surface levy collected from 29ha.

V. THE PROBLEM ON REDUCTION OF 10% OF LAND USE LEVY UPON PAYING SUFFICIENT LAND USE LEVY WITHIN 60 DAYS AS FROM THE DAY OF SIGNING CONTRACT:

The city People’s Committee sees that reduction of 10% is a form to support and promote clearance householders in payment for budget and support on loan interest for investors when transfering land use right. On other hand, reduction of 10% of land use levy will mobilize quickly revenue source into budget in order to re-invest in development, instead of the city budget’s having to borrow money with the lowest average interest rate of 12%/year. This is conformable with clause 2, Article 14 of the Government’s Decree No. 38/2000/ND-CP of August 23, 2000 on the collection of land use levy “Land users that fully pay the land use levy in lump-sum according to notices of the tax agencies shall enjoy 20% reduction of the payable land use levy amount” and applies clause 2, Article 9 of the Decree No. 61/CP, of July 05, 1994, on dwelling house purchase, sale and business: “… If the buyer pays the full amount upon signing the contract, he/she will enjoy a 10% discount…”; in conformity with the Decision No. 13/2006/QD-TTg of January 16, 2006 of the Prime Minister on a number of preferential budget financial mechanism for Da Nang city and the Circular No. 34/2006/TT-BTC of April 19, 2006 of the Ministry of Finance.

So the competence of decision is belong to the city People’s Committee. The city considered, saw actual effectiveness before making decision. This is the revenue which local budget is kept 100%, not divided under rate with central budget and this revenue source is used for only investment in development. So, according to the Budget Law, local authority has right to decide reduction of 10% of land use levy, the city People’s Committee affirms that implementation of this policy is one of flexible and creative application of the city bringing actual effectiveness, the revenue of budget is increased every year.

Estimating till January 2013, people and enterprises are in land use levy debts of city of about 4 thousand billion dong.

If calculating the interest rate in case the land users postpone payment and slippage in prices in comparison with immediately collecting money, how effective it is (?!). In 2011, because of the difficulties of economy, the city failed to collect land use levy debts; in 2012, still failed to collect them because the Government issued the Resolution No. 13/NQ-CP; in 2013, the Government continues rescheduling of debts according to the Resolution No. 02/NQ-CP and it is possible not to be easy to collect these land use levy debts. If calculating the interest rate of 12%/year, in 4 years, the interest rate is 48%. It shows that the city’s 10% reduction is lower than very much in comparison with the interest rate of 4 above-mentioned years.

Result of land use levy collection during 10 last years (2002-2011) is 24,617.61 billion dong, in order to put into balance of basic construction expenditures, getting rate of 73.81% /total capital sources for basic construction expenditures (33,353.79 billion dong).

In brief, when defining prices for assigning land use right, the city had based on the annual land price tables promulgated by the city People’s Committee, with calculation of coefficients as prescribed such as: Coefficient of classifying depth of land lots, concealing coefficients, construction density, coefficient for are with advantage position, market coefficients, etc in arcodance with methods of determining land prices specified by the Government in the Decree No. 188/2004/ND-CP of November 16, 2004, on methods of determining land prices and assorted-land price brackets, guides of the Ministry of Finance in the Circular No. 145/2007/TT-BTC of December 06, 2007 guiding implementation of the Government’s Decree No. 188/2004/ND-CP of November 16, 2004. The unit prices, which are specified for each area by the city People’s Committee, are in the land price frame and higher than many times of minimum price prescribed by the Goverment.

Individuals, organizations that had transferred land use right for each other are one beneficiary (because they are siblings or person of company and company) Example if the actual value of an area is 100 billion dong, they may borrow 60 billion dong (60%), but when making the contract of transfer, they lift its fictitious value up to 600 billion dong aiming to borrow bank for 360 billion dong in order to invest in other project. Case of Phuc Thien Long Limited Liability Company, which is stated in the Government Inspectorate’s conclusions, is a example. In fact, the siblings transfer land for each other by this way. So it is impossible to use that fictitious values to compare with the values which had been approved by the city People’s Committee with differences in order to conclude causing loss.

From analyze above, the city People’s Committee affirms:

1- Reduction of 10% of land use levy is guidelines of the city in application of regulations of law, which brings actual effectiveness, the city’s budget revenues is increased every year, and restraints slippage in prices in order to increase investment effect, gets benefit for budget when performing investment in economic- social development, especially construction works for urban technical infrastructure structure, social security, defense and security, etc On the other hand, the city People’s Committee assumes that 10% reduction is a form to support and promote people in clearance areas in payment for city’s budget and support on loan interest rates for investors when receiving land use right.

2. Determination and decision on prices for handing the land use right, which had been discussed by collective leaders of city People’s Committee are proper with its competence, have grounds according to regulations of the Government, guides of the Ministry of Finance, and in conformity with the market prices at that time.

So the Government Inspectorate's conclusion of causing budget loss of 3,434,254,712,950 dong is insufficient grounds and unpersuasive.

This conclusion impacts strongly the city’s revolution movement and the process of implementation of the Resolution No. 33-NQ/TW, of October 16, 2003 of the Political Ministry, on construction and development of Da Nang city in the period of national industrialization and modernization.

During 16 last years, with efforts and trying the best of the city’s Committee of Party, local authority and people, with the support, help of the Central, Da Nang has had comprehensive changes in urban face, material and mental life of people has been improved and increased, political security and order, social safety are firmly kept. The city has concentrated to effectivenessly implement programs bringing human culture nature such as the program of “The 5-no city” with objectives of “No special poor household, no drop-out pupil, no beggar, no drug addict in the community, no murder for looting property”; the program of “the 3-yes city” with objectives of “Having houses, having jobs and urban civilization lifestyle”, bulding a environmental city, etc. These are premises for city in continuing to build into a development centre, being one of leading city in industrialization and modernization, positively participating in international economic intergration of the Central of Vietnam. The most precious is Da Nang’s creating the high consensus of all classes of people in society while implementing the city’s guidelines.

For a long time, Da Nang has been assessed by the Central that being a local with good movements and new, effective methods. Inspection may show mistakes in the course of leading, aim to learn by experiences for better implementation but not conclusions which are unpersuasive and impact the city’s revolution movement.

According to direction of the Prime Minister in the official dispatch No. 1930/VPCP_VI, of November 19, 2012, the city People’s Committee is working with the affair delegation of the Ministry of Public Security now and it took the initiative to have the official dispatch No. 475/UBND-NCPC of January 16, 2013, proposing the Ministry of Natural Resources and Environment, the Ministry of Finance, the Ministry of Planning and Investment as soon as possible to arrange time in order to work with the city for clarifying as direction of the Prime Minister.

The above is feedback of Da Nang People’s Committee for conclusions of the Government Inspectorate in the Announcement No. 160/TB-TTCP of January 17, 2013.