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May 27, 2020 / 19:27

Vietnam parliament mulls over extending land lease exemption for farmers

The waived tax is estimated to reach US$326 million a year until 2025.

A majority of Vietnamese lawmakers at the ongoing session of the National Assembly (NA) have agreed with an extension to land lease exemption for farmland throughout 2025 to boost the nation’s agriculture sector.

 Vietnam mulls over extending tax on farmland. Photo: AFP

The extension aims to lure more investment into agricultural projects.

Speaking at the NA’s online meeting on May 25, Minister of Finance Dinh Tien Dung said the exemption of tax on the use of agricultural land would facilitate the development of the agriculture-farmer-rural area pillar.

The tax amount to be waived in the next five years is estimated at VND7.5 trillion (US$326 million) annually.

Local experts said the policy does not hinder Vietnam’s trade ties with other countries and international commitments.

Lawmaker Nguyen Hong Van said the move would encourage investment into agriculture, contributing to the sector’s restructuring and improving products' competitiveness.

Lawmaker Dang Hoai Tan said the government has been determined to keep the acreage under paddy cultivation unchanged at 3.76 million hectares to ensure food security. Currently, about 47% of Vietnam’s workforce is participating in the agriculture sector.

According to lawmaker Nguyen Ngoc Phuong, there have around 50,000 businesses working in the agriculture sector, including 10,200 that directly invest in agro-forestry-fisheries (50% of them in agriculture, 35% in fisheries, and 15% in forestry).

The number of companies operating in the agriculture sector accounts for 8% of the country’s total businesses and 93% of agricultural firms are tiny.

At the meeting, the finance ministry also weighed a proposal to tax fallow land to increase the use of farmland.