Investment in agriculture and rural areas encouraged
It is hoped that the document will encourage organizations, households, and individuals to invest in agriculture and agricultural restructuring toward greater industrialization.
Exemption and reduction of the agricultural land use tax is a form of direct support for farmers, freeing capital for re-investment in production which will boost farmers’ standard of living, ease rural economic difficulties, and raise farmers’ morale.
Under current regulations, only a small number of people pay agricultural land use tax.
They include organizations and individuals who use agricultural land in excess of the regulated limit, civil organizations, and military organizations who rent agricultural land.
Under the draft resolution, these people will be exempt from the tax until the end of 2020.
The exemption will encourage independent farmers and organizations to invest in the agricultural sector.
Nguyen Van The, NA deputy for Soc Trang province, said, “By not charging land tax, businesses and people can be encouraged to invest in expanding production. Those who don’t have land become laborers or start offering services. It means a shift from farm labor to non-agricultural labor. This will make farming more efficient."
Exemption from the agricultural land use tax will only reduce state revenues by about US$1.5 million.
NA deputy Nguyen Van Canh of Binh Dinh said, "When people have to pay a land use tax, they do their best to use the land to justify the money they have spent. But if they are exempted from the tax, they lose this motivation, so the revised resolution should stipulate that the amount of the exemption must be re-invested in land improvement. "
Some deputies want the Government to monitor how the policy on agricultural land use tax is implemented and improve it in order to ensure a cconsistent tax policy for both agricultural and non-agricultural land.
