July 10, 2024

 

Vietnam's finance ministry seeks continued farming land tax exemption to drive investments for agriculture

 
 

 

Vietnam's Ministry of Finance has asked the country's government to extend farming land use tax exemption to attract more investments into the agricultural sector.

 

The ministry expects that such a policy will be submitted to the National Assembly's Standing Committee for consideration and addition to the 2025 Law and Ordinance Development Programme in September 2024, as well as for discussion and approval at the ninth meeting of the 15th session of the National Assembly in May next year.

 

The ministry said that the exemption of agricultural land use tax is a necessary policy to continue institutionalising national policies and guidelines on agriculture, farmers and rural areas.

 

Statistics from the Ministry of Agriculture and Rural Development show that there are currently over 50,000 companies investing in agriculture, a very modest number compared to the total of over 900,000 businesses operating in Vietnam.

 

About 96% of the agricultural enterprises are small and micro enterprises. Considering the potential and proportion of the agricultural sector in the economy, the current number of enterprises is still quite small and do not meet the requirements of agricultural development in the context of international economic integration.

 

The Ministry of Finance said that continuing to implement the agricultural land use tax exemption policy for organisations directly using farm land for agricultural production is one of the effective solutions to increase the growth rate of agricultural, forestry, and fishery production value to about 3% per year.

 

For households and individuals engaged in agricultural production, it is also necessary to continue to have preferential policies to exempt agricultural land use tax for the next period to support and encourage the accumulation and concentration of land for agricultural production investment.

 

The implementation of agricultural land use tax exemption policies for households and individuals along with policies to encourage organisations and businesses to invest in the agricultural sector, is expected to create a unified and reasonable preferential policy regime to encourage society's investment resources in the agricultural sector.

 

As such, the Ministry of Finance recommends two options: the first option is to extend tax exemption from January 1, 2026 to December 31, 2030 and the second is to extend tax exemption from January 1, 2026 to December 31, 2035.

 

The ministry leans towards the first option as Vietnam is in the process of implementing a five-year socio-economic development plan for 2021-25.


According to the ministry, over the past 20 years, policies on agricultural land use tax exemption and reduction have had an important impact, contributing to the implementation of national policies in eliminating hunger and poverty reduction and at the same time, encouraging the development of large-scale agricultural production.

 

- VNA