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Land tax laws look for boundaries   2010-03-27 - VietNamNet/VIR

Heated arguments over imposing taxes for land encroachment could soon be a thing of the past. A new law named the Non-agricultural Land Use Tax Law will replace the Housing Tax Law, seen by many as redundant in today’s climate.


The public’s encroachment onto public land is rampant in some areas

“The largest target of the Housing Tax Law is to restrict speculation. However, de facto speculation aimed at land, not houses. Using the law to prevent speculation, thus, is not suitable,” Minister of Finance Vu Van Ninh told the National Assembly Standing Committee’s meeting last week.


As specified by the draft Non-agricultural Land Use Tax Law, to be imposed on land for residences and for specific purposes such as land for non-agriculture businesses, the tax rate for using land within the limit will be 0.03 per cent [of the price quoted by the provincial people’s committee for that land area].


For land plots that exceed the limit less than three times, the tax rate will be 0.06 per cent. Exceeding the limit three times or higher will be subject to a 0.1 per cent tax. For encroached areas, the rate is 0.15 per cent. The mentioned-above limit is regulated by municipal and provincial people’s committees as a basis for applying the tax.


Ninh said the tax rate for encroached land was five-times higher than the taxes for land use within boundaries, which would increase the state budget’s revenue and contribute to restricting public land encroachment on urban areas.


Nguyen Van Thuan, chairman of the National Assembly Legal Committee, said public land encroachment was rampant and it would be unreasonable not to collect the land tax while moving houses from encroached lands was always a tough challenge.


However, National Assembly People’s Aspiration Committee chairman Tran The Vuong said that while the current law tried to limit land encroachment, applying a tax for land encroachment would be considered as giving tacit approval to the practice.


National Assembly office chairman Tran Dinh Dan argued adding a tax for land encroachment would face two problems. First, the tax rate could be too low to restrict land encroachment and the tax collection meant that the state organs would be admitting the legality of encroaching on these areas.


“The tax should be applied only for areas indicated on land use certificates, the encroached land areas must be reclaimed to express the law’s strictness,” Dan told VIR.


Phung Quoc Hien, chairman of the National Assembly Finance and Budget Committee, said the tax collection would not be an admission of land encroachment’s legality and would only encourage effective land use.


The government and the National Assembly Standing Committee will submit a draft of the Non-agricultural Land Use Tax Law to the National Assembly at its next meeting in May.


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