Proposal to Extend Agricultural Land Use Tax Exemption for 5 Years

The exemption period for agricultural land use tax may be extended by another five years, according to a proposal from the Ministry of Finance.

The exemption from agricultural land use tax may be extended for another 5 years.

This content was stated by the Ministry of Finance in its submission proposing the drafting of a Resolution on extending the exemption from agricultural land use tax until the end of 2030.

Accordingly, the authorities have put forward two options. Option 1: The Ministry of Finance proposes extending the exemption of agricultural land use tax for another 5 years, from January 1, 2026 to December 31, 2030. The Ministry argues that the 5-year socio-economic development plan (2021-2025) is being implemented in the context of a complex global situation, with many opportunities, advantages, difficulties, and challenges intertwined.

Furthermore, Vietnam’s economic growth during this period has slowed considerably due to the impact of the pandemic and geopolitical instability. Achieving the target of an average GDP growth rate of 6.5-7% over the next five years is very difficult, according to the Ministry of Finance. Therefore, extending the exemption of agricultural land use tax until 2030 is necessary to support agricultural development and create momentum for economic growth.

Option 2 proposes extending the exemption from agricultural land use tax for another 10 years, until the end of 2035. The agency analyzed that a 10-year tax exemption period has political significance, supporting investment in expanding production, as well as increasing the capacity to respond to market shocks and manage risks related to natural disasters and epidemics.

“However, extending this tax exemption for another 10 years is a relatively long period given the unpredictable global economic situation and the lack of a specific direction for Vietnam’s socio-economic development strategy after 2030,” the Ministry of Finance stated. Therefore, the Ministry proposed implementing option one, extending the agricultural land use tax exemption for another 5 years, until the end of 2030.

The Ministry of Finance believes that extending the land tax exemption period will encourage organizations and individuals to invest in agriculture, further enhancing the value and competitiveness of agricultural products in the context of international integration.

After 20 years of implementing policies to exempt and reduce agricultural land taxes, the lives of farmers have improved. They are more confident in investing in agricultural production, and employment in rural areas has also improved.

According to the Ministry of Finance, the average amount of land tax reductions and exemptions was over 3,268 billion VND per year during the period 2003-2010. This amount nearly doubled to 6,308 billion VND per year in the following six years. Over the past three years, the amount of agricultural land tax exemptions has been approximately 7,500 billion VND per year.

Source: Thanh Nien Newspaper