Ministry of Finance wants to impose real estate speculation tax

05/08/2017   Viewed: 761
Given that the property tax is not yet appropriate, the agency wants to have its own tax law, particularly targeting large properties such as homes and land.
Vietnam currently has many tax related to property, namely real estate such as agricultural land use tax, non-agricultural land; Corporate / personal income tax from real estate, registration fee ...). However, according to the Ministry of Finance, tax policy with assets has not yet fulfilled its role as one of the stable sources of revenue for the state budget. As a result, the agency recently issued a thematic report to show the need to develop a separate property tax law that would help manage land use and curb real estate speculation.
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The direction of imposing large property tax and land to limit real estate speculation and increase revenue efficiency are being considered by the Ministry of Finance. Illustration

In this report, the Ministry of Finance refers to the tendency of property tax reform in some countries such as Canada, Australia and Malaysia which in turn is aiming at taxing large value assets and expanding tax collectors.

"The taxation of property is in line with socio-economic development conditions in the coming period, contributing to strengthen the state management of property," the report said.

Not only that, according to this agency, Vietnam's per capita income has steadily increased in recent years, from $ 1,400 in 2013 to $ 2,200 in 2016 and is projected to increase to $ 3,400. By 2020). Accordingly, it is expected that the ownership, investment and real estate investment of the people tend to increase, the Ministry of Finance said that it is necessary to study and develop property tax law to limit speculation and use. Real estate wasted.

In addition, the current land use tax rate in Vietnam accounts for only 0.03% of GDP and about 0.15% of total state budget revenue, according to the Ministry of Finance. In other countries, land use tax revenues are a major source of funds. As in the OECD countries, property taxes account for 2% of national revenue. In Canada this rate is 4% and in the US is 1-3%. In developed countries, these revenues account for about 0.6% and about 0.68% for transition countries.

"Property tax is a direct tax that countries have the ability to mobilize relatively close to the ability of taxpayers to make real contributions to their assets, especially housing and land," the agency said. This says.

Thus, although the report does not directly address specific taxation options, the Treasury has repeatedly unveiled a solution to taxation on second-hand real estate. Late last year, a representative of the agency also revealed the possibility of building a property tax law to do so. However, while many tax experts favor two to three or more taxpayers, the idea faces the reaction of the real estate business, particularly the " Time is not right "or" market needs support ".

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