The Ministry of Finance’s proposed tax on houses and land has raised many citizens’ concerns. Experts said that it is necessary to avoid affecting the opportunity to access housing for middle- and low-income people in urban areas.
If housing taxation is not be calculated conscientiously, many experts believe that this can create opposite effects, causing the increase in house prices and the difficulty of accessing housing for those people with low and middle incomes.
Mr Nguyen Van Minh – the owner of a 2-storey motel in Kim Chung commune, Dong Anh district, Hanoi, said that he and his wife borrowed money from relatives and then borrowed a bank loan to build 20 rooms on the grandparents’ property land to allow workers in the industrial park to rent houses and to earn money for their monthly living expenses. According to Mr. Minh, every month, excluding interest cost on bank loans and principal payment of approximately VND 10 million, he and his wife get an old-age pension of about VND 15 million. Mr. Minh was worried that if the State imposes taxes on the rental accommodation and the house in which we live, the old-age pension of my wife and I will be lost by several million dongs.
According to another share of Ms. Vu Thi Lanh, she and her husband monthly earn VND 20 million from the rent. The money saved from the house rental, the couple spends half for their children’s education and the others for the family’s living expenses. With this fixed income, the couple still pays enough money for land tax, personal income tax and VAT etc., Currently, in which the State has added another tax, Ms. Lanh is worried that she won’t have enough money for living expenses.
Affecting the opportunity to access housing of middle- and low-income people in urban areas
When the price of goods increases due to inflation, many people believe that in reality, family circumstance deduction cannot cover the cost of living and the rent, if any, also make life easier. However, tax payment is unreasonable.
Many experts believe that most of the middle- and low-income people in urban areas have difficulty in accessing housing. Besides, there are still many people whose income is too low to buy a house. Therefore, it is necessary to carefully consider housing taxation if this tax with these affordable apartments is for the poor and low-income people. The fact that some countries in the world have applied property tax or estate tax for a long time does not mean that Vietnam also needs to follow international practices.
In fact, people have to pay a non-agricultural land use tax for many years. For housing taxation, firstly it is necessary to review tax policies on houses and land. In particular, there must be a database of real estate so that State agencies has information on who owns this house.
According to Dr Nguyen Ngoc Tu (Hanoi University of Business and Technology), the National Assembly and the Government are issuing a series of policies to reduce taxes and provide compensation for the interest rate in order to recover and develop the economy affected by the extent of Covid 19 pandemic. Therefore, in these two years, it is only about tax reduction to remove difficulties, support citizens and businesses in cost reduction. In order not to cause unnecessary panic for the people, it is unnecessary to mention raising taxes or creating new taxes this year and next year.