Ministry of Finance responds to proposal to increase tax on non-agricultural land use

Accordingly, voters in Long An province proposed to exempt agricultural land use tax for people and consider increasing non-agricultural land use tax, because people's lives are still difficult.

Regarding this content, the Ministry of Finance said that agricultural land use tax is implemented according to the provisions of the Law on Agricultural Land Use Tax; Ordinance of the National Assembly Standing Committee on additional tax for households using agricultural land exceeding the area limit.

From 2001 to present, implementing the Party and State's policies on agriculture , farmers and rural areas, contributing to directly supporting farmers, encouraging organizations and individuals to invest in agriculture and rural areas, the preferential policy on agricultural land use tax has been increasingly expanded and is currently exempted until December 31, 2025 according to Resolution No. 55/2020/QH12, Resolution No. 28/2016/QH14 and Resolution No. 107/2020/QH14 dated June 10, 2020 of the National Assembly, except for the area of agricultural land that the State assigns to organizations for management but is not directly used for agricultural production but assigned to other organizations and individuals to receive contracts for agricultural production.

The policy on non-agricultural land use tax (NLA) is implemented according to the provisions of the Law on NLA Tax No. 48/2010/QH12. According to the provisions of the Law on NLA Tax, the tax rate for residential land is 0.03% for the area within the limit, 0.07% for the area exceeding no more than 3 times the limit, 0.15% for the area exceeding more than 3 times the limit; for non-agricultural production and business land, non-agricultural land used for business purposes, the tax rate is 0.03%.

Since January 1, 2010, the National Assembly has not adjusted the tax rate for non-agricultural land use. The Law on Non-agricultural Land Use Tax and its implementing documents also stipulate tax exemptions and 50% reductions in payable tax, including land within the limit for poor households, land within the limit in areas with particularly difficult socio-economic conditions, and areas with difficult socio-economic conditions.

Law No. 106/2016/QH13 dated April 6, 2019 of the National Assembly on regulations on exemption of land use tax for households and individuals with annual tax payable of fifty thousand VND or less.

The Ministry of Finance said that, based on Plan No. 81/KH-UBTVQH15 dated November 5, 2021 of the National Assembly Standing Committee on implementing Conclusion No. 190KL/TW of the Politburo and the Project on orientations for the Law-making Program for the 15th National Assembly term, the Government has issued Report No. 71/BC-CP dated March 16, 2023 to the National Assembly Standing Committee on the results of implementing Plan No. 81.

In particular, the Government reported the results of reviewing and researching the Law on State-owned Land Use Tax (including the assessment of State-owned Land Use Tax rates); the Law on State-owned Land Use Tax and proposed to develop a draft Law on Real Estate Tax, expected to be added to the Law and Ordinance Development Program in 2024, submitted to the National Assembly for comments at the October 2024 session and approved at the May 2025 session.

To carry out the above tasks, the Ministry of Finance is currently researching and submitting to competent authorities a proposal to perfect the land use tax policy to ensure it is consistent with Vietnam's socio-economic conditions, consistent with international practices, ensuring the consistency of the tax policy system related to real estate and placed within the overall reform of the tax policy system in the 2021-2030 period.

Wisdom

Source