Ministry of Finance proposes to continue exempting agricultural land use tax until the end of 2030

The Ministry of Finance proposed two options for the duration of continued exemption from agricultural land use tax, in which the Ministry is leaning towards the 5-year option instead of 10 years.

The Ministry of Finance has just completed a submission to the Government on the proposal to draft a National Assembly Resolution on exemption of agricultural land use tax.

Exempt more than 7,500 billion VND in taxes each year in the period 2021-2023

In the draft report on the proposal to build a National Assembly Resolution project on agricultural land use tax exemption, the Ministry of Finance said that after 20 years of implementation, the total amount of agricultural land use tax exempted and reduced in the period 2003-2010 averaged more than 3,268 billion VND/year.

During the period from 2011-2016, the average tax exemption was about 6,308 billion VND/year; during the period from 2017-2018 and until the end of 2020, it was about 7,438 billion VND/year and during the period from 2021-2023, it was about 7,500 billion VND/year.

The policy of exemption and reduction of agricultural land use tax is a solution with great and important impacts, contributing to the implementation of the Party and State's policies and viewpoints on agriculture, farmers and rural areas in each period; contributing to direct support for farmers; encouraging organizations and individuals to invest in agriculture, farmers and rural areas; encouraging land concentration for large-scale agricultural production.

"This also contributes to encouraging land concentration for large-scale agricultural production, contributing to the restructuring of the agricultural and rural economy towards modernization; contributing to improving and enhancing farmers' lives, creating jobs for rural areas, encouraging farmers to be more attached to the land, and confidently investing in agricultural production," the Ministry of Finance said.

In particular, this policy also contributes to improving the competitiveness of agricultural products in the market in the context of international economic integration. Therefore, in the coming time, it is necessary to continue to exempt agricultural land use tax as currently regulated.

Proposal to continue exempting agricultural land use tax until the end of 2030

According to the Ministry of Finance, in reality, the number of enterprises investing in agriculture is still quite modest. Currently, the whole country has about 50,000 enterprises investing in agriculture (data from the Ministry of Agriculture and Rural Development) - a very modest number compared to the total number of over 900,000 enterprises operating in our country (accounting for about 5.5%), of which about 96% are small and micro enterprises.

“Compared to the potential and proportion of the agricultural sector in the economy, the current number of enterprises is still quite small, the scale of agricultural enterprises is still limited, the development of enterprises in the agricultural sector is still very modest compared to the potential and development advantages, not meeting the requirements of agricultural development in the context of international economic integration,” the Ministry of Finance assessed.

Therefore, to contribute to achieving the target of the number of enterprises investing and doing business in the agricultural sector by 2030 and increasing the growth rate of agricultural, forestry and fishery production value to about 3%/year, continuing to implement the policy of exempting agricultural land use tax is one of the effective support solutions.

In addition, the Ministry of Finance also believes that for households and individuals engaged in agricultural production, it is necessary to continue to have preferential policies on exemption of agricultural land use tax for the next period to support and encourage land accumulation and concentration for investment in agricultural production.

The Ministry proposed two options: Option one, extending the tax exemption from January 1, 2026 to December 31, 2030; and option two from January 1, 2026 to December 31, 2035.

The Ministry of Finance is leaning towards the first option. According to the explanation, Vietnam is in the process of implementing the 5-year socio-economic development plan for 2021-2025 in the context of a complicated world situation, with many opportunities, advantages, difficulties and challenges intertwined.

Due to the severe impact of the pandemic and global geopolitical fluctuations, Vietnam's economic growth in the first half of the 2021-2025 five-year plan has slowed down significantly.

According to the National Assembly's mid-term economic report for 2021-2025, ensuring the achievement of the average GDP target of 6.5-7% over the next 5 years is very difficult.

Given the multi-dimensional developments of the world economy, with the growth rate as in recent times, towards the prospect of sustainable growth in the long term, it is necessary to continue implementing the policy of exempting agricultural land use tax in the period of 2026-2030 to support sustainable agricultural development, create momentum for post-crisis economic growth, contribute to encouraging farmers to confidently invest in production, create conditions to increase labor productivity, and improve living standards.

The Ministry of Finance assessed that although the tax exemption solution until 2035 has many positive impacts, the 10-year tax exemption period is a relatively long period in the context of unpredictable fluctuations in the world economy. Vietnam's socio-economic development strategy after 2030 has not been specifically oriented.

“To ensure the goal is consistent with the Party and State's viewpoints and policies on agriculture, farmers, rural areas and the practical socio-economic situation, the Ministry of Finance proposes to implement solution 1 (the period of exemption from agricultural land use tax is 5 years, until the end of 2023),” the submission stated.

Agricultural land use tax policy is exempted until December 31, 2025

Implementing the Party and State's policy of hunger eradication and poverty reduction, while supporting farmers and encouraging the development of agricultural production, the policy of exemption and reduction of agricultural land use tax has been implemented since 2001.

According to current regulations, the agricultural land use tax policy is exempted until December 31, 2025, except for the agricultural land area that the State assigns to organizations for management but does not directly use the land for agricultural production but assigns it to other organizations and individuals to receive contracts for agricultural production.

Source: https://baodautu.vn/bo-tai-chinh-de-xuat-tiep-tuc-mien-thue-su-dung-dat-nong-nghiep-det-het-nam-2030-d219750.html