Hanoi (VNS/VNA) - The Ministry of Finance has asked the Government to extend farming land use tax exemption to attract more investment into the agricultural sector.

The finance ministry is expected that the policy will be submitted to the National Assembly’s Standing Committee for consideration and addition to the 2025 Law and Ordinance Development Programme in September 2024, and for discussion and approval at the 9th meeting of the 15th session of the National Assembly on May 2025.

The Ministry of Finance said that exemption of agricultural land use tax is a necessary policy to continue institutionalising the Party and State's policies and guidelines on agriculture, farmers and rural areas.

The reality is that the number of businesses investing in agriculture is still quite modest. Statistics from the Ministry of Agriculture and Rural Development show that there are currently over 50,000 companies investing in agriculture, a very modest number compared to the total of over 900,000 businesses operating in Vietnam.

About 96% of the agricultural enterprises are small and micro enterprises. Compared to the potential and proportion of the agricultural sector in the economy, the current number of enterprises is still quite small and do not meet the requirements of agricultural development in the context of international economic integration.

The Ministry of Finance said that continuing to implement the agricultural land use tax exemption policy for organisations directly using farm land for agricultural production is one of the effective support solutions to increase the growth rate of agricultural, forestry and fishery production value to about 3% per year.

For households and individuals engaged in agricultural production, it is also necessary to continue to have preferential policies to exempt agricultural land use tax for the next period to support and encourage the accumulation and concentration of land for agricultural production investment.

The implementation of agricultural land use tax exemption policies for households and individuals along with policies to encourage organisations and businesses to invest in the agricultural sector, will create a unified and reasonable preferential policy regime to encourage society's investment resources in the agricultural sector.

Therefore, the Ministry of Finance recommends two options: The first option is to extend tax exemption from January 1, 2026 to December 31, 2030 and the second option is to extend tax exemption from January 1, 2026 to December 31, 2035.

The Ministry of Finance is leaning towards the first option.

It explained its choice because Việt Nam is in the process of implementing the 5-year socio-economic development plan for 2021-25, in the context of a complicated world situation. Due to the severe impact of the epidemic and global geopolitical conflicts, Vietnam's economic growth in the first half of the 2021-25 five-year plan has slowed significantly.

The National Assembly's mid-term economic report for 2021-25 also shows difficulties in achieving a 6.5 – 7% five-year average GDP target.

According to the Ministry of Finance, over the past 20 years, policies on agricultural land use tax exemption and reduction have had an important impact, contributing to the implementation of the Party and State's policies in eliminating hunger and poverty reduction and at the same time supporting farmers, encouraging the development of large-scale agricultural production, contributing to the restructuring of agricultural and rural economies towards modernisation.

The exemption and reduction of agricultural land use taxes have contributed to improving farmers' lives, creating jobs for rural areas and encouraging farmers to be more attached to the land and to feel secure when nvesting in agricultural production.

Over the past 20 years, the total number of agricultura🎃l land use tax exemptions and reductions reached an average of about 3.268 trillion VND per year in the period 2003-10; 6.308 trillion VND per year in the period 2011-16; 7.438 trillion VND per year in the period 2017-18 and 7.5 trillion VND per year in the period 2021-23, according to the Ministry of Finance./.