Fierce public objections about its proposal to impose value-added tax (VAT) on the transfer of land-use rights have forced the Ministry of Finance to shelve the move (Photo: thanhnien.vn) Hanoi (VNA) - Fierce public objections about its proposal to imposevalue-added tax (VAT) on the transfer of land-use rights have forced theMinistry of Finance to shelve the move.
In August last year, theministry drafted a bill to amend and supplement articles of the tax law.Regarding VAT on land-use rights transfer, it proposed to tax it at thestandard VAT rate of 10 percent.
This proposal immediatelyfaced adverse reactions from the real estate sector. According to many experts,the increase of VAT will increase the price of properties and significantlyaffect the absorption rate of the market by putting a damper on housing demand.
Le Hoang Chau, Chairman ofHCM City Real Estate Association, told Phap Luat (HCM City Law) newspaperthat imposing VAT could cause double taxation, which would push up land prices.Current taxes and fees applied to the transfer of land-use rights alreadyinclude taxes on transfer of these rights, registration fees and personalincome tax on sellers.
“The real-estate marketultilises thousands of products from more than 90 sectors, such as themanufacturing, construction and service sectors. Therefore, the imposition ofVAT will lead to higher prices of raw materials and labour, lifting the priceof houses,” Chau added.
Sharing the same idea,economist Ngo Tri Long said the newly-proposed VAT would put a massive burdenon home buyers and the whole real estate market.
Nguyen Duy Minh, directorof the L&L Group, agreed, saying that applying VAT would put real-estatebusinesses in difficulties, forcing them to increase house prices.
Therefore, he said theabolishment of the VAT would help stabilise the real-estate market. Stable taxpolicies help prevent houses price from fluctuating, encouraging people toinvest more,” Minh said.
Economist Nguyen Tri Hieusaid that applying VAT on the transfer of land-use rights would result inmarket fluctuations, indirectly affecting other sectors.
“Houses price increases wouldmake people tighten spending. Real-estate companies would find it difficult tosell houses, would lose profits and the State would lose tax,” Hieu said.-VNA
In August last year, theministry drafted a bill to amend and supplement articles of the tax law.Regarding VAT on land-use rights transfer, it proposed to tax it at thestandard VAT rate of 10 percent.
This proposal immediatelyfaced adverse reactions from the real estate sector. According to many experts,the increase of VAT will increase the price of properties and significantlyaffect the absorption rate of the market by putting a damper on housing demand.
Le Hoang Chau, Chairman ofHCM City Real Estate Association, told Phap Luat (HCM City Law) newspaperthat imposing VAT could cause double taxation, which would push up land prices.Current taxes and fees applied to the transfer of land-use rights alreadyinclude taxes on transfer of these rights, registration fees and personalincome tax on sellers.
“The real-estate marketultilises thousands of products from more than 90 sectors, such as themanufacturing, construction and service sectors. Therefore, the imposition ofVAT will lead to higher prices of raw materials and labour, lifting the priceof houses,” Chau added.
Sharing the same idea,economist Ngo Tri Long said the newly-proposed VAT would put a massive burdenon home buyers and the whole real estate market.
Nguyen Duy Minh, directorof the L&L Group, agreed, saying that applying VAT would put real-estatebusinesses in difficulties, forcing them to increase house prices.
Therefore, he said theabolishment of the VAT would help stabilise the real-estate market. Stable taxpolicies help prevent houses price from fluctuating, encouraging people toinvest more,” Minh said.
Economist Nguyen Tri Hieusaid that applying VAT on the transfer of land-use rights would result inmarket fluctuations, indirectly affecting other sectors.
“Houses price increases wouldmake people tighten spending. Real-estate companies would find it difficult tosell houses, would lose profits and the State would lose tax,” Hieu said.-VNA
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