His argument is in stark contrast with what the local media said would squeeze tax from almost all home owners in the country.

The Ministry of Finance earlier introduced a draft property tax law in which homes valued at higher than VND700 million would be taxed 0.3% or 0.4%. Luxury cars, yachts, and planes worth over VND1.5 billion (US$65,860) would also be subject to the proposed tax.

Minister Dung told local media on April 20 that the property tax would not leave any impact on low-income people and that the draft law had been prepared in line with a National Assembly resolution and a Government directive.

The draft law, if approved, would help strengthen State management of assets and the effectiveness of using such assets, especially land and housing, restrict the wastefulness of public assets, prevent corruption and speculation, and raise State budget revenue, he said.

The ministry has consulted experts and taxpayers about the planned tax. If the Government gives the nod to the draft law, it would go before the National Assembly, the minister said.

Asked why the ministry had not found ways to cut State budget spending, instead of levying new taxes, Minister Dung said the State budget would be restructured based on State budget collection policy in the process of the country integrating into the global economy.

Lower import duties and fuel prices have resulted in State budget collection falls, forcing the ministry to propose this tax to ensure State budget balances in the future, he reasoned. Meanwhile, he added, the ministry would also take measures to slash public spending.

However, National Assembly General Secretary Nguyen Hanh Phuc told Tuoi Tre newspaper on April 17 that the legislature had yet to look into a draft law on property tax.

Prime Minister Nguyen Xuan Phuc said on April 20 at a meeting with his advisory team that the property tax should be levied on rich people and those owning a second home.

SGT