The Ministry of Finance recently submitted a draft law to the Ministry of Justice for appraisal. This draft proposes amendments and additions to several tax laws, including those on corporate income, personal income, and non-agricultural land use.
Specifically, the drafting agency has proposed supplementing regulations to levy taxes on abandoned land and land that is not put into use or is slow to be utilized. The proposed tax rate is 0,2%, and no maximum limit will be applied.
According to the Ministry of Finance, the existing non-agricultural land use tax policy already includes provisions related to the economical and efficient use of land. For instance, a tax rate of 0,03% is applied to residential land within the allocated limit. Areas exceeding this limit by up to three times are subject to a 0,07% tax, and areas exceeding three times the limit are taxed at 0,15%. The 0,15% rate also applies to land used for improper purposes or in violation of regulations.
However, the Ministry of Finance noted that the Law on Non-Agricultural Land Use Tax currently lacks specific provisions for tax rates on abandoned land or land that is slow to be utilized.
The drafting agency also stated that the proposal to tax abandoned land aims to further institutionalize Resolution 21 of the Central Committee. This resolution calls for the development of appropriate financial and tax policies to promote economical and efficient land use, specifically requiring research into higher taxes for these types of land.
In the same submission to the Ministry of Justice, the Ministry of Finance proposed maintaining the 0,2% non-agricultural land use tax on encroached land. Previously, a draft law submitted to the National Assembly Standing Committee last month had removed this tax due to its low effectiveness. At the time, the government explained that land encroachment was already subject to administrative or criminal penalties, making an additional tax unnecessary.
However, the majority of opinions within the National Assembly's Economic and Financial Committee argued that a tax should still be levied on encroached areas that have not yet been dealt with, to prevent budget losses.
The law amending and supplementing several tax laws is scheduled for consideration and approval by the National Assembly during its session expected to open on 17/10. If approved, the draft law will take effect from 1/1/2027.
Anh Tu
