English
Vietnam: Finance Ministry to raise taxes on land and housing
Taxes on land and housing in Vietnam are far lower than those in other countries, exposing the need for higher tax rates to improve fiscal revenues.
The Ministry of Finance (MoF) has recently approved the scheme for tax reform until 2030.
Under the scheme, the first draft law on property will be proposed before the National Assembly in 2023 and is expected to become law the next year. Afterward, MoF will issue additional legal documents to elaborate the law.
MoF said the draft will exempt agricultural land users from land use taxes until late 2025, a move that aligns with the Party and the State’s stance on agriculture and rural development.
Regarding non-agricultural land, the draft will increase the prescribed added-value applicable to land and raise taxes on housing to prevent land speculation and incentivise the efficient use of houses.
It is also worth noting that the Prime Minister approved the ‘Strategy for Tax Reform until 2030’ in April.
The tax reform is broad-based, covering various types of tax, including value-added tax, excise tax, corporate income tax and environmental tax.
Its objective is to move the Vietnamese tax system towards a ‘good tax system’ defined by international norms and improve tax revenues to support the ten-year Strategy for Socio-economic Development between 2021 and 2030.
The Prime Minister has assigned MoF the task of implementing the strategy and developing new tax policies that are clear, simple, well-targeted and compatible with relevant regulations on taxation.
Regarding taxes imposed on people who own a lot of land and housing, former Deputy Minister of Natural Resources and Environment Dang Hung Vo revealed that the Government had considered introducing the taxes for a long time but they did not see the light of day due to the absence of a tax reform scheme.
With the issuance of Resolution 18, Vo said it is time to levy higher taxes on the owners.
He also said taxes on land and housing in Vietnam stand at just 0.03 per cent, far lower than those in other countries, at between 1.0 and 1.5 per cent. The rise in taxes is expected to add substantially to the State budget and bridge the tax gap.
In 2018, MoF considered drawing up a law on property that imposes taxes on land, houses, aircraft, yachts and cars worth at least VND1.5 billion. For residential houses, the tax rates go between 0.3 per cent and 0.4 per cent.
Unfortunately, the proposal was cancelled because of dissenting voices from the public.
Source: Vietnam News