Policy on tax exemption for agricultural land use positive in many aspects

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Chairwoman of the National Assembly Nguyen Thi Kim Ngan comments on the draft Resolution

Proposal on tax exemption till end of 2025

The Government's official letter states: following the Party and State's guidelines on hunger eradication and poverty alleviation, along with providing support to farmers, encouraging agricultural production development, and the policy on tax exemption and reduction for agricultural land use has been applied since 2001. The agricultural land use tax is exempt until the end of December 31, 2020 according to Resolution No. 55/2010 / QH12 and Resolution No. 28/2016 / QH14.

The summary and assessment of 20 years of implementation of the policy on tax exemption and reduction for agricultural land use shows that the total exempted and reduced tax for agricultural land use from 2003 to 2010 was about VND3,268.5 billion per year on average. From 2011to 2016, it was about VND6,308.3 billion peryear on average. From 2017 to the end of 2020 is expected at VND7,438.5 billion per year on average.

The continued implementation of agricultural land use tax exemption is necessary, continuing to institutionalize the Party and State's guidelines and policies on agriculture, farmers and rural areas, while continuing to encourage organizations and individuals to invest in agriculture, contributing to restructuring the agriculture sector.

To further promote the results of taxexemption for agricultural land use, the Government proposed to the National Assembly to promulgate a Resolution on tax exemption for agricultural land use to extend the tax exemption for agricultural land use until December 31, 2025.

The continuity of tax exemption for agricultural land use by the end of 2025 will not reduce the state budget revenue because this is the ongoing policy. The exempted tax for agricultural land use is VND7,500 billion per year.

Reporting on the verification, Chairman of the National Assembly's Finance and Budget Committee Nguyen Duc Hai said: The Finance and Budget Standing Committee agreed with the Government's proposal, but the policy on agricultural land use tax needs be considered and evaluated in the overall policies with the Land Law, the Law on non-agricultural land use tax and other taxes and revenues currently applicable to land (land use fees, land rents).

At the same time, Government agencies are currently studying the possibility of developing a Property Tax Law, which includes agricultural land.

Meanwhile, the agencies have not summarized, assessed and studied in an overall way to guide the appropriate policy development in a common relationship, the Government's proposal on continuing to promulgate a Resolution to extend the tax exemption and reduction for agricultural land use for the next five years is approved and submitted to the National Assembly for consideration and decision at the 9th session (May 2020).

Minister of Finance reports to the National Assembly Standing Committee

Agriculture is still a "salvage" for Vietnam's economy

Commenting at the discussion, Deputy Chairman of the National Assembly, Mr. Uong Chu Luu said that the recent policy of tax exemption for agricultural land use has been positive in many aspects of socio-economic life. However, the National Assembly's program has not set out any amendments to the Law on Agricultural land use tax exemption and the Law has not regulated a tax exemption period so it cannot be revised.

Therefore, the periodic tax exemption for agricultural land use should be continued to encourage agricultural-rural development and supportfarmers to participate in agricultural production under a Resolution is appropriate. This action also contributes to further supporting those who were previously exempt from tax.

Agreeing with the above comments, Chairman of the Foreign Affairs Committee Nguyen Ngoc Giau stated: The tax exemption for agricultural land use should be done by the adoption of the Resolution, which is effective for each period, but it should not revise the law. Because this action is done in accordance with President Ho Chi Minh's Will and implementation of policies on agricultural development and supporting farmers to stick with agriculture.

At the meeting, National Assembly Chairwoman Nguyen Thi Kim Ngan affirmed that this policy had great significance to the agriculture sector and to support farmers in difficulties such as during the Covid-19 pandemic in many countries around the world, including Vietnam. In times of financial crisis, agricultural production is still a "salvage" for the Vietnamese economy.

While sectors such as industry, services and transportation are stagnant, the agriculture sector is still developing. When the disease occurred in Vietnam, farmers who had to work away from home still return to their homeland to work in their gardens and plots for farming.

According to Mrs. Ngan, the fact that farmers are not assured of production and desert land has many causes, such as: the price of agricultural products increases, the consumption of agricultural products is difficult. Therefore, the Finance-Budget Committee needs to assess the impact and inadequacies of tax exemption for agricultural land use thoroughly. Accordingly, the Government needs to assess the subjects and scope of tax exemption and how to encourage farmers to use land effectively and without wasting land. The evaluation and verification must be based on comments by the local Department of Agriculture and Rural Development and the Farmers' Associations.

The draft will be considered and completed by the Government and the verification agency for official submission to the National Assembly in the meeting in May.