VnnNews – Members of the National Assembly’s Finance & Budget Committee have labelled a proposed housing tax as unfeasible.
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The anti-speculation law?
When compiling the law, the Ministry of Finance (MOF) stated its main aim was to fight property speculation, which was considered the reason behind abnormally high house prices
Therefore, the ministry suggested a progressive taxation scheme, under which, people with more houses had to pay higher taxes.
Houses worth over 500 million dong will be taxed 0.03 percent per annum on the value in excess of the 500 million threshold
It was pointed out, however, by finance and budget committee members that the suggested lowest tax rate of 0.03 percent was not high enough to help fight speculation.
Experts pointed to other countries where the the lowest housing tax rate is one percent. Even a suggested highest tax rate of 0.09 percent was way too low.
Therefore, they suggested that the lowest tax rate start at 0.09 percent which they believe would encourage people to use land effectively and help fight speculation
However, other members don’t think combating speculation should be the goal of the housing tax law.
Committee member Tran Hong Viet says speculation is a normal activity in a market economy and not a violation of the law.
He argues that once people have money, they could use it as they wish. Some purchased gold and dollars to hoard while others purchased real estate.
“After businesses fulfill all their duties, no one should hinder activities which are not prohibited by law. They are not crimes,” Viet said.
How much tax the State can collect from housing tax?
Chairman of the National Assembly’s Finance & Budget Committee, Phung Quoc Hien, has warned that the sum of money the State expects to collect from housing taxation, estimated at 12 trillion dong per annum, will not be enough to cover expenses on tax collection work.
Hien said that if the suggested taxation scheme is approved, most Vietnamese people will not have to pay tax.
He said that in the first period of its implementation, the taxation should not focus on trying to collect more tax but instead simply aim to improve property and land management efficiency
He also said with a great deal of work still to be done, it will be unfeasible to put the law into effect as of January 1, 2011 as previously suggested. He believes January 1, 2012 would be more reasonable.
VietNamNet/DTCK, TBKTVN
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