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Wednesday,  Sep 20,2017,14:41 (GMT+7)

Ministry suggests building property tax law

The Saigon Times Daily
Wednesday,  Aug 9,2017,23:07 (GMT+7)
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Ministry suggests building property tax law

The Saigon Times Daily

HCMC – The Ministry of Finance has proposed the Government build a property tax law in a bid to generate a new revenue stream for the State budget.

According to the Vietnam News Agency, a Finance Ministry report says land use tax revenue accounts for a mere 0.03% of gross domestic product (GDP), and around 0.15% of total State budget revenue.

Meanwhile, according to the ministry, property tax in other countries is a vital revenue stream for their budgets.

Property tax revenue makes up about 2% of GDP in OECD (the Organization for Economic Co-operation and Development) countries, with Canada taking the lead with 4%, followed by the United States with 3%. The property tax is regarded as their direct tax revenue source, as it is levied on specific assets, especially housing and land.

Besides, asset tax reform in some countries like Canada, Australia and Malaysia is mainly intended to tax high-value assets and add property tax payers.

The future prospect for the domestic real estate market is bright as a host of new legal documents such as the Housing Law and the amended Law on Real Estate Business will come into force, the Vietnam News Agency quoted a source from the ministry as saying.

Especially, average incomes of Vietnamese citizens soared from US$1,400 in 2013 to US$2,200 in 2016 per capita. The figure is forecast to reach US$3,400 by 2020.

According to the source, real estate investment will be more active in the coming years. Therefore, it is necessary to introduce a property tax law to curb speculation and prevent a wasteful use of real estate while creating a new source of revenue for the State budget.

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