The National Assembly has yet to look into a draft law on property tax which would force individuals to pay the tax on their personal assets, a stance opposite to an announcement by the Finance Ministry last week, Tuoi Tre newspaper reports.

Pham Dinh Thi, head of the Tax Policy Department under the Finance Ministry, said at a press conference last Friday that the ministry was considering imposing the tax on houses, land, and movable properties.

However, NA General Secretary Nguyen Hanh Phuc told Tuoi Tre newspaper on April 17 that he had got the news about the controversial proposed tax from local news outlets and social media. The proposal was made known by a department-level spokesperson of the Finance Ministry.

“In the process of policy making, research and suggestion, they (the Finance Ministry) could come up with plans and proposals. The problem here is that there is something wrong with the way they send their message to the public,” said Phuc.

He emphasized that the NA Standing Committee gave feedback on the 2018-2019 lawmaking program on Monday. No official proposal for the draft law on property tax was made.

Nguyen Duy Hung, deputy head of the Government Office, also confirmed with the newspaper that the Government has no intention to either take a look at the draft law on property tax or forward it to the NA for consideration.

Earlier, he announced at an NA Standing Committee meeting on Monday that the main priority of Prime Minister Nguyen Xuan Phuc and the Government is to amend and issue laws aimed at implementing administrative reforms, removing obstacles, and creating favorable conditions for local residents to do business.

As stated by Thi at the press conference last Friday, the draft law would require that all houses valued at higher than VND700 million (US$30,700) would be subject to a tax rate of 0.4% on the amount above the threshold, while luxury cars, yachts, and planes worth over VND1.5 billion (US$65,800) would also be affected.

Moreover, the ministry suggested two methods to determine a taxable threshold, either by remaining housing value or by area.

Taxing properties by area is simple and makes it easy to determine the payable tax amount. However, it covers owners of low-value or makeshift houses and homes in rural areas but may skip houses of higher value in cities.

If the tax is imposed on houses of over 100 square meters, owners of nearly 1.9 million shanty houses and those in rural areas will be subject to the tax, according to the 2011 statistics of the National Housing Development strategy until 2020, with a vision for 2030.

Therefore, the ministry is in favor of the tax calculation based on the value of houses to ensure fairness among homeowners. Accordingly, houses whose value exceeds VND700 million or VND1 billion would be taxed 0.3% or 0.4%.

With the rate of 0.3%, the ministry expects to collect VND22.7 trillion from owners of houses worth over VND1 billion, or VND23.3 trillion from those houses costing more than VND700 million. Meanwhile, the tax rate of 0.4% would help generate VND30.3 trillion to VND31 trillion respectively.

The ministry is more inclined towards a 0.4% tax rate for houses which are valued over VND700 million, according to Thi of the Tax Policy Department.

In addition, the ministry proposed not taxing the second home, as it is not in line with the current reality, and might adversely affect the local real estate market.

SGT