Exempting agricultural land use tax to encourage organizations and individuals to invest in agriculture, farmers, and rural areas. |
According to the Ministry of Finance, the draft Resolution of the National Assembly on exempting agricultural land use tax was constructed to encourage investment in agriculture, farmers, and rural areas. This contributes to the restructuring of the agricultural sector, further enhancing the value of agricultural products, and improving their competitiveness in the context of international integration.
The agricultural land use tax policy has been in place for over 30 years and is currently exempt until December 31, 2025, according to Resolutions No. 55/2010/QH12, No. 28/2016/QH14, and No. 107/2020/QH14 of the National Assembly. This exemption does not apply to the area of agricultural land that the State allocates to organizations for management but does not directly use for agricultural production, instead leasing it to other organizations or individuals for agricultural production through contracts.
Evaluating the agricultural land use tax policy after more than 30 years of implementation reveals that some provisions are no longer suitable for the current socio-economic conditions. The method of tax calculation is outdated, resulting in low revenue (tax is calculated based on rice yields and collected in cash). Furthermore, most of the content is no longer applicable in practice due to the implementation of the policy exempting agricultural land use tax for the entire area until December 31, 2025.
Although the agricultural land use tax policy was issued in 1993, in reality, since 2001, changes have only been made to the tax incentive provisions (exemptions and reductions) to carry out the Party and State’s guidelines on encouraging the development of agriculture, farmers, and rural areas. Localities unanimously agree on the necessity of continuing the exemption of agricultural land use tax as per the current regulations for the next phase.
Proposing to extend the exemption of agricultural land use tax until December 31, 2030
To continue the achievements of the agricultural land use tax exemption, align with the Party and State’s orientations on agriculture, farmers, and rural areas, encourage organizations, households, and individuals to invest in agriculture and rural areas, promote farm economies, contribute to the structural shift of agriculture and rural areas towards industrialization and modernization, enhance the competitiveness of agricultural products in the market amid international economic integration, continue to support job creation in rural areas, improve farmers’ incomes and livelihoods, contribute to new rural construction, and ensure compliance with international practices, the Ministry of Finance proposes to the Government to submit to the National Assembly for the issuance of a Resolution to extend the time of agricultural land use tax exemption according to Resolution No. 55/2010/QH12, Resolution No. 28/2016/QH14, and Resolution No. 107/2020/QH15 until December 31, 2030, based on Clause 2, Article 15 of the Law on Promulgation of Legal Documents.
If approved, the Resolution will take effect from January 1, 2026.
The Ministry of Finance assesses that continuing the exemption of agricultural land use tax until the end of 2030 will not reduce revenue as this policy is already being implemented in practice. With the proposed extension of the agricultural land use tax exemption until December 31, 2030, as per the current regulations, the exempted amount of agricultural land use tax is approximately VND 7,500 billion per year. This will continue to be a form of direct support for farmers and a source of direct financial investment in the agricultural sector, helping to create jobs, improve incomes, and encourage sustainable economic development in rural areas. It also demonstrates the consistent policy of the Party and State regarding agriculture, farmers, and rural areas, in line with the five-year Socio-Economic Development Strategy, the master plan for the development of the agricultural production sector, and the feasibility of the policy.
Khanh Linh
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