Government affirms that agricultural land use tax exemption would not reduce budget revenue

	Exempting using agricultural land tax does not affect revenue collection
	More motivation to develop agriculture

Minister of Finance Dinh Tien Dung, under the Prime Minister's authorization, presented the draft Resolution on Agricultural Land Use Tax Exemption.

Tax exemption until the end of 2025

At the National Assembly session on May 25, Minister of Finance Dinh Tien Dung, under the Prime Minister's authorization, presented the Proposal on the draft Resolution on agricultural land use tax exemption.

Specifically, the Government proposes to the National Assembly to promulgate the National Assembly's Resolution on agricultural land use tax exemption under thefollowing contents: Extending the agricultural land use tax exemption according to Resolution No. 55/2010 / NQ12 dated November 24, 2010 on exemption and reduction of agricultural land use tax and Resolution No. 28/2016 / NQ14 dated November 11, 2016 of the National Assembly amending and supplementing a number of articles of Resolution No. 55/2010 / QH12 until the end of December 31, 2025.

The promulgation in the form of the Resolution by the National Assembly to continue the implementation of agricultural land use tax exemption within five years (from January 1, 2021 to the end of December 31, 2025) is appropriate because this tax exemption is given for a certain period.

“From 2026 onwards, it is necessary to have an overall assessment of impacts of tax policies related to real estate to propose a general tax policy for real estate, in line with socio-economic situation and feasibility,”said Minister Dinh Tien Dung.

He also said that in the process of developing the draft Resolution, the National Assembly Standing Committee requested to look back on policies and subjects to implement the goal of exemption and reduction of agricultural land use tax to promote production and avoid land waste and fallow.

In this regard, the Government reported that, according to the 2013 Land Law and the provisions of the Law on agricultural land use tax, those who are subject to land allotment by the State without collection of land use fees are mainly farmers(including those who are subject to land leasing but do not lease land) and those who are using allotted agricultural land withina certain period and have paid land use fees, will be exempted from the tax until the end of 2020 (except agricultural land areas which are allotted to an organization but that organization does not use these areas for farm production but allowsother organizations or individuals use under lease contract for farm production, 100% of agricultural land fee must be paid).

In fact, the process of agricultural land use has shown that there is a situation that agricultural land is allocated to farmers but is not used for farming or used inefficiently, resulting in land wastage and fallow.

However, the land law does not have a legal framework to define what is fallow land (for example, unused land forone crop, two crops, three crops or how long, it is called fallow land; if the land is stopped for one crop, if it will be considered fallow land).

Moreover, Point h, i, Clause 1, Article 64 of 2013 Land Law stipulates that some types of unused agricultural land within a certain period are determined as acts of law violation and subject to recovery as follows: Land for annual crops is not used for 12 consecutive months; land for perennial crops is not used for 18 consecutive months; afforestation land is not be used for 24 consecutive months; land allocated or leased by the State to implement investment projects is not used for 12 consecutive months or is used 24monthslater than the progress described in investment projects since receiving land.

In addition, fallow land is caused by many reasons such as natural disasters (drought, water shortage), epidemics, no output, low efficiency of agricultural production, labor shortage, and barriers in land law to accumulate and mobilize land, rather than agricultural land use tax exemption.

“From the above analysis, the Government considers that the subjects of agricultural land use tax exemptionare appropriate. The Government will carefully study and assess the tax collection on fallow land when studying, proposing and finalizing land law and policies in general as well as studying, proposing and finalizing tax policies related to land in particular,” said Minister Dinh Tien Dung.

The exemption does not reduce budget revenue

Regarding the impact of the draft Resolution, Dung said the further exemption of agricultural land use tax to the end of 2025 will not reduce the state budget revenue because this policy is being implemented in reality.

The exempted agricultural land usetax of VND7,500 billion per year will continue to be a direct support for agricultural production organizations and individuals, and an important financial source for direct investment in the agricultural and rural sector to contribute toinvesting in and expanding production scale to improve productivity and product quality, contributing to restructuring agricultural and rural economy towards modernization.

Thereby contributing to helping farmers improve their lives, encouraging farmers to feel secure in production and stick to agricultural production activities, contributing to encouraging investment and promoting sustainable agricultural economy development.

At the same time, the Minister of Finance also affirmed that the proposal on further exemption of agricultural land use tax until the end of 2025 is consistent with the Party and State's guidelines on agriculture, farmers and rural areas; in line with the five-year Socio-Economic Development Strategy, the master plan on agricultural production development, the agricultural production cycle, ensuring the feasibility of the policy.

At the same time, the further exemption of agricultural land use fee does not cause conflicts and obstacles in trade relations with other countries and does not violate Vietnam's international commitments when joining the WTO.

"The draft Resolution also does not stipulate administrative procedures and gender equality issues, so there is no compliance cost with administrative procedures and does not cause gender inequality," said Dung.