High lending interest rates pose threat to economy
It's time to cut medium-term interest rates below 10% as businesses don't want and don’t dare to borrow money given such rates, said Le Tu Minh, chairman of IMG Investment JSC.
The difficulties facing the real estate market lie in three areas. The first is fighting land speculation. Many people buy land and wait for prices to go up, leaving that land redundant and in limbo.
Other countries use taxes to minimize speculation. For example, we have a project in Australia that we have to pay a 2% land tax for every year. Land prices are determined annually by the tax authorities independently. Every year, we have to pay $700,000-800,000 in land taxes until the project is implemented. This year, the local government decided to increase this tax rate to 4%, which is very high.
If Vietnam applies this policy, only those who really implement projects will dare to keep the land, and when holding the land, they must kick off the projects very quickly. This measure not only combats land speculation but also helps the Ministry of Finance collect a large source of revenue.
We recommend that the Land Law drafting board supplements and applies an initial 2% annual land tax rate and progressive rates when land plots are not used for business activities.
Secondly, we thank the State Bank of Vietnam for taking timely measures to stabilize the real estate market. However, interest rate hikes should be time-bound and quantitative.
It's time to cut medium-term lending rates below 10%. With rates higher than 10%, no economy can be healthy. Businesses don't want and don’t dare to borrow money and customers put money into other areas instead of real estate. The tallies at developed countries are only 3-5%. We should lower rates to around 8.5% like two years ago, so that Vietnam can continue to be an Asian dragon.
Measures should be taken to prevent or restrict real estate developers from joining banks and vice versa because businesses engaging in both fields mobilize social capital mainly for their own projects, resulting in little social effect.
Thirdly, it is necessary to remove legal obstacles and streamline administrative procedures. The current biggest difficulty facing real estate businesses is overlapping legal regulations. For the same problem or the same regulation, there are many interpretations. Competent authorities at all levels, especially local levels, do not or dare not implement these regulations.
In enterprises, we assign work with a deadline. Anyone who misses the deadline without an appropriate reason will be fined or have their roles changed. However, it is not the same for government officials when they do not fulfill their duties. We clearly understand that losses due to delays are greater than those from embezzlement.
I propose that there should be clear regulations on the responsibilities of authorities at all levels. The Ministry of Planning and Investment should allow Vietnamese enterprises to extend land lease terms or give them land use rights for 70 years so that industrial parks are attractive enough for tenants in line with legal regulations and helping increase local revenue.
* Speech at a dialogue between property developers and Prime Minister Pham Minh Chinh on August 3, 2023.
- Read More
Vietnam needs large, specialized logistics centers to compete better: official
Vietnam needs large-scale, specialized logistics centers that will enable greater competitiveness of local economies and enterprises, says Tran Thanh Hai, deputy head of the Ministry of Industry and Trade's agency of foreign trade.
Economy - Sun, November 3, 2024 | 11:00 am GMT+7
Vietnam manufacturing sector sees 35% increase in Q3 job orders: Adecco
Vietnam’s manufacturing and sourcing sectors saw a substantial 35% year-on-year increase and a 52% quarter-on-quarter increase in Q3/2024 job orders, global workforce solutions provider Adecco said in a reseach report released Thursday.
Economy - Sun, November 3, 2024 | 9:00 am GMT+7
Construction majors to continue capitalizing on public investment projects
Vietnamese construction giants are expected to continue capitalizing on public investment projects for the remainder of this year after delivering strong performances in the third quarter, analysts say.
Companies - Sun, November 3, 2024 | 8:00 am GMT+7
Former Government Office chairman receives $7,900 bribe from property project
Mai Tien Dung, former Minister-Government Office Chairman, received a bribe worth VND200 million ($7,900) from Nguyen Cao Tri, owner of the Dai Ninh eco-resort and urban area project in Lam Dong province.
Society - Sat, November 2, 2024 | 9:13 pm GMT+7
Thai food giant CP enters public-private partnership to promote food system transformation
Thai-invested C.P. Vietnam Livestock JSC and the Partnership for Sustainable Agriculture Vietnam (PSAV) signed a memorandum of understanding Friday on working together to advance sustainable agriculture in the country.
Companies - Sat, November 2, 2024 | 7:16 pm GMT+7
Central Vietnam province Quang Ngai to begin work on new VSIP industrial park next year
Vietnam’s central province of Quang Ngai will work with the investor to have construction of VSIP II Quang Ngai, a facility based on the Vietnam-Singapore Industrial Park (VSIP) model, begin in August 2025.
Industrial real estate - Sat, November 2, 2024 | 3:47 pm GMT+7
Vietnam likely to grow 6.5% in 2024-2025: VinaCapital
VinaCapital, among the biggest foreign-run asset managers in Vietnam, has forecast the country’s economy to achieve 6.5% growth in both 2024 and 2025, with the composition of the expansion to change to more domestically driven factors next year.
Economy - Sat, November 2, 2024 | 2:00 pm GMT+7
Major Vietnamese developer Novaland appoints new CEO
Duong Van Bac, who joined Novaland as chief financial officer in August 2023, has been appointed general director, starting Friday.
Companies - Sat, November 2, 2024 | 10:24 am GMT+7
Vietnamese conglomerate Bamboo Capital posts 36-fold profit growth in Q3
Ho Chi Minh City-based Bamboo Capital Group recorded an after-tax profit of VND331.2 billion ($13.1 million) in the third quarter of 2024, an astounding 36-fold expansion year-on-year.
Southeast Asia - Sat, November 2, 2024 | 9:41 am GMT+7
ThaiBev to bag $54 mln from Sabeco’s upcoming dividend payout
Vietnam Beverage, wholly owned by Thai Beverage (ThaiBev) will rake in VND1,374 billion ($54.26 million) worth of dividend from Ho Chi Minh City-based top brewer Sabeco.
Companies - Sat, November 2, 2024 | 9:13 am GMT+7
Steel heavyweight Hoa Phat pours over $2 bln into central Vietnam complex
Leading Vietnamese steelmaker Hoa Phat had invested more than VND52.5 trillion ($2.08 billion) in its Dung Quat Iron and Steel Integrated Complex (Dung Quat 2) in the central province of Quang Ngai as of Q3/2024.
Industries - Sat, November 2, 2024 | 8:00 am GMT+7
Vietnam becomes Australia’s fastest-growing inbound market
The number of Vietnamese tourists to Australia has grown significantly after the Covid-19 pandemic, with nearly 178,000 reported in the 12 months to August 2024, according to a Friday press release by the Australian Minister for Trade and Tourism’s Office.
Southeast Asia - Fri, November 1, 2024 | 10:02 pm GMT+7
Study finds shift in Thai consumers’ spending patterns
Consumers in Thailand are shifting their spending focus to experiences and investments, according to the latest ASEAN Consumer Sentiment Study (ACSS) by United Overseas Bank (UOB).
Southeast Asia - Fri, November 1, 2024 | 10:00 pm GMT+7
Energy security, digitalization key to Indonesia's economic growth
The Indonesian government is prioritizing long-term economic growth through energy security, digitalization, and natural resource industrialization, according to Deputy Minister of Finance Thomas Djiwandono.
Southeast Asia - Fri, November 1, 2024 | 9:58 pm GMT+7
Vietnam PM's Middle East tour creates breakthroughs in economic, trade, investment cooperation: FM
Prime Minister Pham Minh Chinh’s freshly ended six-day trip to the UAE, Saudi Arabia and Qatar has produced important outcomes, demonstrating the growing relations between Vietnam and the three Middle-East countries, Deputy Prime Minister and Foreign Minister Bui Thanh Son told the Vietnam News Agency.
Politics - Fri, November 1, 2024 | 9:25 pm GMT+7
Vietnam, Qatar look to tap potential for energy, oil & gas collaboration
Vietnam and Qatar have recognized the significant potential for further collaboration in multiple sectors such as energy, oil and gas, especially LNG, agriculture, Halal industry, and banking.
Politics - Fri, November 1, 2024 | 9:02 pm GMT+7
- Infographics
-
Pakistani, Indian sugar bans won't affect Vietnam market: association
-
Wood pellet exports down but Japan buys more
-
Additional capital of FDI companies up 93% on-year
-
FDI capital expansion surges 66% in first half
-
Vietnam GDP grows 6.42% in six months
-
Disaster prevention efforts get a boost with Zalo mini-app: official