Farmers in Dong Anh District of Hanoi prepare land for crop cultivation (Photo:VNA) Hanoi (VNA) - An estimated 12.5 million people will be eligible foragriculture land tax exemption, leaving merely 77,000 people still subject tothis tax.
Thetax waiver, provided in a decree signed by Prime Minister Nguyen Xuan Phuc atthe end of last month, came in for mixed reviews. While many farmers hailed it,others said there were more pressing problems for their sector.
Accordingly,owners – households or individuals – will no longer have to pay tax for thecertified agriculture lands in their possession.
Accordingto a report by the Ministry of Finance, total agriculture land in the countryreached 26.8 million hectares in 2014, 38 percent of which – 10.2 millionhectares – were subjected to tax under the Agriculture Land Taxation Law.However, tax is now waived for 6.9 million hectares, or 68 percent of the totaltaxable agriculture land.
LeVan Banh, Director of the Department of Agro-Fisheries Processing and SaltProduction, said 70-80 percent of farmers in Vietnam own fields that are lessthan one hectare wide, so the total amount of collected tax is notconsiderable. Lifting the tax, on the other hand, will be beneficial to farmersas well as other entities who want to combine fields for large-scaleproduction, he added.
Lastyear, Vo Trong Viet, Chairman of the National Defence and Security Committeeunder the National Assembly, said that the actual tax to be waived under theproposed decree would be about 34.4 billion VND a year (1.5 million USD) so it“wouldn’t mean much of a loss to the State budget.”
Toput this into perspective, he added, the loss incurred by mismanagement by TrinhXuan Thanh when he was at the helm of the State-owned PetroVietnam ConstructionJSC was tantamount to 30 years of farmland tax.
However,Viet said in conclusion, the tax waive would be meaningful to farmers,encouraging production.
NguyenKim Chuyen, deputy head of the Quyet Thang Co-operative in the southern coastalcity of Ba Ria-Vung Tau, praised the recent introduction of many facilitatingpolicies for farmers, including subsidy for irrigation, tax waiver, and lowrate loans.
Tran Van Hoang, a farmer in Dam Doi district of the southernmost province of CaMau, was elated. “The expansion of subjects eligible to land tax exemption iswelcome. It shows that the Government cares about farmers and creatingfavourable conditions for them to have a stable livelihood and be moremotivated to invest in agriculture,” Hoàng said.
However,regarding unused agricultural land granted to businesses, he urged theGovernment to either reclaim those land plots or impose a high tax rate onthem.
Anotherfarmer, Vo Quan Huy, from the southern province of Long An, however, was notimpressed. “While tax exemption is always good, I don’t think it will have anotable impact. In reality, the commune’s government has never been too eagerto collect agriculture land tax anyway, since it doesn’t amount to much,” Huysaid.
“Nevertheless,the decree still matters to someone who owns many swathes of land like me. Iestimate each year, I can save up some dozens of millions of đồng via this taxcut,” he added. He owns some 1,000 hectares of agriculture land, scattered overthe southern provinces of Long An, Soc Trang, Bac Lieu, among others, but manyof the plots are registered under another person’s name due to land ownershiplimits, and he wished the Government would focus more on lifting thoselimitations.
Businessesinvestments
HoXuan Hung, former deputy minister of the Ministry of Agriculture and RuralDevelopment (MARD), head of Vietnam’s General Council of Agriculture and RuralDevelopment, is also positive about the new provision, calling it “good newsfor both farmers and those investing or intending to invest in the agriculturesector.”
Heassessed that, “production costs will be cut back a bit, and the money savedcan be used towards production expansion, developing industrial large-scaleagriculture production, reducing risks.”
NguyenDo Anh Tuan, Director of the Institute of Policy and Strategy for Agricultureand Rural Development (IPSARD), said that currently, Vietnam’s agriculturesector is facing a range of pressing problems, such as small-scale andscattered production or unpredictable weather and extreme climate events, evenissues with legal documents and policy.
"That’sthe reason why investment in agriculture is always a risky venture," hesaid. “A change in policies would prove impactful to production andinvestment.”
Accordingto an IPSARD survey, 63 percent of agriculture businesses said they havedifficulties gaining access to land; 70 percent said it’s hard for them toobtain access to credit; and 82.5 percent said they haven’t been covered byagriculture insurance yet.
Businessas a major player leading the agriculture value chain is being increasinglyrecognised, Tuan argued. “If we can create an open business environment,developing substantial support policies like ensuring property rights,contractual rights, cutting back on red tape, etc., then businesses will bemore interested in the agriculture sector,” he said.
Ina country like Vietnam where agriculture remains a dominant economic factor,more businesses and more investment in the sector will create jobs whichbenefit the population. For this reason, Tuan urged the Government formulatemore robust policies in the vein of this new tax exemption to incentiviseagricultural business.-VNA
Thetax waiver, provided in a decree signed by Prime Minister Nguyen Xuan Phuc atthe end of last month, came in for mixed reviews. While many farmers hailed it,others said there were more pressing problems for their sector.
Accordingly,owners – households or individuals – will no longer have to pay tax for thecertified agriculture lands in their possession.
Accordingto a report by the Ministry of Finance, total agriculture land in the countryreached 26.8 million hectares in 2014, 38 percent of which – 10.2 millionhectares – were subjected to tax under the Agriculture Land Taxation Law.However, tax is now waived for 6.9 million hectares, or 68 percent of the totaltaxable agriculture land.
LeVan Banh, Director of the Department of Agro-Fisheries Processing and SaltProduction, said 70-80 percent of farmers in Vietnam own fields that are lessthan one hectare wide, so the total amount of collected tax is notconsiderable. Lifting the tax, on the other hand, will be beneficial to farmersas well as other entities who want to combine fields for large-scaleproduction, he added.
Lastyear, Vo Trong Viet, Chairman of the National Defence and Security Committeeunder the National Assembly, said that the actual tax to be waived under theproposed decree would be about 34.4 billion VND a year (1.5 million USD) so it“wouldn’t mean much of a loss to the State budget.”
Toput this into perspective, he added, the loss incurred by mismanagement by TrinhXuan Thanh when he was at the helm of the State-owned PetroVietnam ConstructionJSC was tantamount to 30 years of farmland tax.
However,Viet said in conclusion, the tax waive would be meaningful to farmers,encouraging production.
NguyenKim Chuyen, deputy head of the Quyet Thang Co-operative in the southern coastalcity of Ba Ria-Vung Tau, praised the recent introduction of many facilitatingpolicies for farmers, including subsidy for irrigation, tax waiver, and lowrate loans.
Tran Van Hoang, a farmer in Dam Doi district of the southernmost province of CaMau, was elated. “The expansion of subjects eligible to land tax exemption iswelcome. It shows that the Government cares about farmers and creatingfavourable conditions for them to have a stable livelihood and be moremotivated to invest in agriculture,” Hoàng said.
However,regarding unused agricultural land granted to businesses, he urged theGovernment to either reclaim those land plots or impose a high tax rate onthem.
Anotherfarmer, Vo Quan Huy, from the southern province of Long An, however, was notimpressed. “While tax exemption is always good, I don’t think it will have anotable impact. In reality, the commune’s government has never been too eagerto collect agriculture land tax anyway, since it doesn’t amount to much,” Huysaid.
“Nevertheless,the decree still matters to someone who owns many swathes of land like me. Iestimate each year, I can save up some dozens of millions of đồng via this taxcut,” he added. He owns some 1,000 hectares of agriculture land, scattered overthe southern provinces of Long An, Soc Trang, Bac Lieu, among others, but manyof the plots are registered under another person’s name due to land ownershiplimits, and he wished the Government would focus more on lifting thoselimitations.
Businessesinvestments
HoXuan Hung, former deputy minister of the Ministry of Agriculture and RuralDevelopment (MARD), head of Vietnam’s General Council of Agriculture and RuralDevelopment, is also positive about the new provision, calling it “good newsfor both farmers and those investing or intending to invest in the agriculturesector.”
Heassessed that, “production costs will be cut back a bit, and the money savedcan be used towards production expansion, developing industrial large-scaleagriculture production, reducing risks.”
NguyenDo Anh Tuan, Director of the Institute of Policy and Strategy for Agricultureand Rural Development (IPSARD), said that currently, Vietnam’s agriculturesector is facing a range of pressing problems, such as small-scale andscattered production or unpredictable weather and extreme climate events, evenissues with legal documents and policy.
"That’sthe reason why investment in agriculture is always a risky venture," hesaid. “A change in policies would prove impactful to production andinvestment.”
Accordingto an IPSARD survey, 63 percent of agriculture businesses said they havedifficulties gaining access to land; 70 percent said it’s hard for them toobtain access to credit; and 82.5 percent said they haven’t been covered byagriculture insurance yet.
Businessas a major player leading the agriculture value chain is being increasinglyrecognised, Tuan argued. “If we can create an open business environment,developing substantial support policies like ensuring property rights,contractual rights, cutting back on red tape, etc., then businesses will bemore interested in the agriculture sector,” he said.
Ina country like Vietnam where agriculture remains a dominant economic factor,more businesses and more investment in the sector will create jobs whichbenefit the population. For this reason, Tuan urged the Government formulatemore robust policies in the vein of this new tax exemption to incentiviseagricultural business.-VNA
VNA
