Risk of imbalance in construction materials

After winning the auction and completing all the necessary procedures, many businesses requested the cancellation of the auction results.

For example, Dong Khanh Construction Co., Ltd. submitted a document requesting to return the Truong Xuan - Tho Loc sand mine in Tinh Ha commune, Son Tinh district, to Quang Ngai province after winning the auction.

According to Dong Khanh Construction Co., Ltd., if the 2023 resource tax rate of 150,000 VND/m3 of sand were applied, the company would have to pay 26.1 billion VND in resource tax. However, with the new tax rate (in 2024) of 230,000 VND/m3, the amount of tax the company would have to pay would exceed 40.1 billion VND, which is 13.9 billion VND higher than the tax payable in 2023.

Hop Nhat Investment Development Joint Stock Company also requested the cancellation of the auction results for a sand mine in Dong My village, Nghia Hiep commune (Tu Nghia district, Quang Ngai province) with an area of ​​approximately 3.26 hectares; Sao Viet Investment and Construction Joint Stock Company requested the cancellation of the auction results for two sand mines, including a sand mine of approximately 3.58 hectares in My Hoa village, Nghia My commune (Tu Nghia district) and a sand mine of 5.9 hectares in The Binh village, Nghia Hiep commune.

In some cases, businesses that won the auction and were given the option to pay resource tax in installments each year also argued that paying the tax according to the new regulations in 2024 (230,000 VND/m3) was too high and requested to pay at the old price of 2023 (150,000 VND/m3).

Some businesses argue that the higher resource tax rate applied in 2024 compared to 2023 will drive up sand prices, affecting businesses and the public.

Quang Ngai Mineral Development Investment Joint Stock Company, owner of the Tinh An - Nghia Dung sand mine in Quang Ngai City, stated that according to the schedule, the company paid the first installment (2023) of 50 billion VND; the remaining four installments will be paid in the following years (2024, 2025, 2026, and 2027), totaling over 15.9 billion VND per year in resource tax. With the new resource tax rate applied in 2024, the amount the company has to pay is over 24.5 billion VND, an increase of over 8.5 billion VND compared to 2023, which is excessively high.

This price increase alters the investment strategy of businesses and will drive up the price of sand in the market, affecting construction companies and the general public.

Regarding this issue, Nguyen Duc Trung, Acting Director of the Department of Natural Resources and Environment of Quang Ngai province, shared that the calculation of taxes on sand in particular and other mineral resources, such as land and stone, in general, in the province must comply with current legal regulations. Specifically, for sand mines that have been successfully auctioned, if the owning enterprise (the winning bidder) has completed the procedures and paid the resource tax in a given year, the latest tax rate applicable will be applied.

Mr. Trung further explained that if the sand mine owner paid the tax in 2023, the sand resource tax rate would be based on the 2023 regulations. If the tax was paid in 2024, it would be based on the 2024 tax regulations.

Regarding businesses requesting the cancellation of bidding results and proposing to apply the 2023 resource tax rates, the Vice Chairman of the Quang Ngai Provincial People's Committee, Tran Hoang Tuan, has also directed relevant units to resolve the issues.

Accordingly, the Quang Ngai Provincial People's Committee did not accept the businesses' request to apply the 2023 resource tax calculation price, but instead insisted that they strictly fulfill their financial obligations as announced by the Quang Ngai Provincial Tax Department.

The Vice Chairman of the Quang Ngai Provincial People's Committee stated that, regarding businesses requesting the cancellation of auction results, the Quang Ngai Provincial People's Committee has granted permission in principle, but has instructed the Quang Ngai Provincial Department of Natural Resources and Environment to take the lead in implementing the process in accordance with regulations. At the same time, the Quang Ngai Provincial Department of Natural Resources and Environment has been tasked with researching effective solutions to address the situation where businesses cancel auction results after the fact, potentially causing imbalances in the supply and demand of construction materials in the province.