NA pushes for farm-land tax cuts

Most National Assembly deputies agree on the need to exempt much agricultural land from taxes or offer incentives to encourage farmers to speed up agricultural development. Photo shows a combine harvester on a paddy field in Chau Thanh District in the Mekong Delta province of An Giang. - vns Trang Duong

The deputies backed the proposal of a draft resolution requesting an exemption of taxes on all agricultural land area being used for research and experimental production, for tree growing areas that also grow at least one crop of rice every year, salt-making areas, and all agricultural land used by poor householders - and other beneficiaries.

Finance Minister Vu Van Ninh told the session that the resolution was aimed at institutionalising the Party and Government's policy to motivate farmers to accumulate capital, increase investment, speed up economic development in agriculture and improve the lives of rural people.

Deputy Nguyen Thi Nguyet Huong said the renewal of agriculture land use tax exemptions and reductions would encourage organisations and individuals to invest in the agricultural sector, which would help speed up the implementation of the social security policy.

However, she asked for a 100-per-cent tax on agriculture land which had been left uncultivated for over two years.

Most members of the NA Finance and Budget Committee agreed it was necessary to continue the exemption and reduce agriculture land use taxes in the time to come. However, some deputies expressed the opinion that it would be necessary in the long term to impose taxes on agriculture land.

The committee proposed a review of the implementation of agricultural land use tax exemptions and reductions in order to make the law fit in with the new development and focus on specific areas.

Deputy Nguyen Thi Hoa said the draft should give tax exemptions to all types of cultivation, including vegetable and fruit growing areas, in an attempt to satisfy the society's demands for agricultural products in terms of both quantity and quality.

She said it would be difficult to grow high quality products, ensure sufficient quantity and low production costs if enterprises were not encouraged to invest in agriculture and accumulate land.

Deputy Nguyen Tan Trinh expressed his disagreement.

He said tax exemptions and reductions must focus on key points and specific areas to avoid scattered grants.

Trinh said it was necessary to classify beneficiaries and categories that would enjoy agricultural land use tax exemptions and reductions according to land use purposes (rice growing land, salt making land, orchards..) and the division of land use periods.

A majority of the deputies said the revenue earned from agricultural land use taxes was not high.

They said the entire exemption of agricultural land use taxes would create a psychological consensus among farmers and give them assurance about their agricultural production.

Most deputies agreed to apply tax exemptions and reductions for 10 years.

On average, VND2,8 trillion (US$149 million) worth of agricultural land use taxes were exempted or reduced to more than 11.2 million households each year from 2003-09.