Property Tax in Vietnam and Related Issues
Tax on property in our country has been formed for a long time with some popular taxes such as agricultural land use tax, and non-agricultural land use tax. However, to date, there has not been a tax called the Property Tax in Vietnam to regulate the types of assets that are actually taxable. Therefore, it is very necessary to study the development of a property tax law, to help ensure revenue for the state budget, fight real estate speculation, and ensure social justice.
Property tax in Vietnam concept
Currently, our country does not have a law on property tax that regulates taxable assets. Therefore, the concept of property tax is still abstract and has not been concretized in legal documents.
Currently, when it comes to “property tax”, there are still different views and approaches. There is a view that “property tax is the name to refer to the property as the object of taxation”. Another view is that “property tax is generally understood as a tax levied on the value of the ownership or use of taxable assets”.
Meanwhile, in the world, some tax studies see “property tax” as an annual tax levied on the net worth of an individual or legal entity and a tax on the holding of property. of individuals or legal entities. The Organization for Economic Co-operation and Development (OECD) defines a property tax as follows: “A property tax is defined as a periodic and non-recurring tax on the use, ownership or Property transfers. This tax includes taxes on real estate or net assets, taxes on changes in ownership of the property through inheritance or gifts, and taxes on capital and financial transactions. Property Tax is a tax levied on buildings and land, levied on the basis of their value. Or in another way, “Property tax is a tax levied on the ownership of property. Merely owning property is a decisive condition for taxpayers to fulfill their legal obligations to property taxes.”
Although there are many different views and concepts about property tax, we believe that property tax can be understood in a general way as a tax collected on the assets of individuals and organizations.
Properties of property tax in Vietnam
Property tax is a direct, non-returnable, and non-reimbursable tax
Property tax is a direct tax levied on taxable assets of organizations, individuals, and households. These assets are created from the income due to the accumulation of people at a certain time, so the property is always inclusive, and broader in scope including income; On the contrary, income is a part of assets, so assets and income have a close relationship with each other. Therefore, the tax on the property is also levied on a part of the income of the subject, so it is a direct tax. In addition, the immediacy of property tax is reflected in the identity of the subject, the taxpayer is also the taxpayer, and in this case, there is no possibility of transferring the tax burden to the taxpayer. for another subject.
On the other hand, in economic nature, property tax is a part of the taxpayer’s income contributing to the state budget, so it will relatively easily encourage the ability of the taxpayer to pay actual tax. In addition, property taxes are non-returnable and non-refundable.
Non-equivalence shows that in the process of tax collection and payment, each owner of equal property value fulfills the same tax payment obligation, and this tax payment does not depend on whether the taxpayer has received or will receive benefits. What is the benefit of the state?
Direct non-refundable is reflected in the tax relationship between tax authorities and taxpayers. When property taxpayers fulfill the obligation to pay taxes to the state budget, this does not mean and does not require the State to directly reimburse them for benefits or products that are commensurate and on par. value of the tax paid. Likewise, taxpayers cannot object to the fulfillment of their tax obligations on the grounds that they are not or are not entitled to receive direct benefits from the State. In other words, taxpayers do not have the right to demand direct material returns from the State before they can pay taxes. Because, according to the tax law, paying tax is a statutory obligation that individuals and organizations must strictly comply with and perform. This obligation is guaranteed by the coercive power of the State.
Although it is not directly reimbursed by a specific type of goods or service, it can be said that a part of the taxpayer’s payable tax amount will be refunded indirectly to them and serve the whole society through public services of the State such as social welfare programs, infrastructure, security and order, and some other forms. The value of these services is not absolute because the return is not reciprocal, but the benefits they enjoy depend on the socio-economic situation, the goals set by the State. as well as the financial situation of the State over the years. Therefore, taxpayers are not voluntarily and have the right to agree on the benefits they will enjoy when paying property tax.
Property tax is a compulsory tax payable to the state budget
Compulsoryness is an inherent characteristic for taxes in general and property taxes in particular, reflected in the fact that taxpayers are obliged to transfer their property to the State when certain conditions are met without must be a payment relationship whether contractual or non-contractual. Therefore, this act does not accompany or carry a reciprocal obligation of the tax authority to the taxpayer, the law does not provide that the taxpayer has the right to request the state agency to provide a right to the taxpayer. other benefits or return certain materials to them at the time of tax collection and payment. In contrast, the tax collection agency is not required to perform this obligation, but in the course of performing its duties, the tax authority has the responsibility and obligation to comply with and properly apply the tax laws along with the tax law. relevant laws, collect correctly and fully the payable tax amount. They are not allowed to choose whether or not to collect the money that people pay into the state budget, especially without discriminating between taxpayers.
Property taxes associated with the element of power
State and tax are two categories that are always associated and exist side by side. Taxes were born, exist, and developed together with the State – an inevitable product of the social division of labor. For taxes in general, property tax in particular has a close relationship with the State and has mutual support. The introduction of a property tax will provide capital and financial potential to help the State perform its functions and duties, on the contrary, the State – with its power, ensures the enforcement of the property tax law. effective.
Property tax in Vietnam is a supplementary tax on income
In a country’s tax system, a property tax exists alongside an income tax and a consumption tax in order to cover the possibilities of paying taxes in the economy. Vietnam is no exception, property tax when built and enacted will be one of the three components that make up the tax system. Besides the characteristics that we have mentioned, the property tax is also a type of tax that supports the tax on income.
This feature can be demonstrated through the current reality when Vietnam’s economy has grown significantly compared to the early period of the unified tax system, the population’s property resources are increasing, and at the same time, the disparity in the value of assets owned between subjects in society is increasing. On the other hand, people’s financial resources and income, especially income from capital, are not easily seen, their income is not only generated from a single source but will form from many sources. variety, including some cases of legal and illegal income. Therefore, tax administration agencies cannot control all their revenue sources, leading to easy tax evasion and tax fraud. At the same time, some parts of the population have underground sources of income, do not have to declare and pay personal income tax, and use this financial source to purchase stored assets, which are commonly available real estate. value. This issue has posed many difficulties and challenges for tax collection agencies, both being unable to control all incomes of taxpayers, and losing revenue to the state budget when our country’s current tax law There is no regulatory mechanism for these behaviors.
Therefore, the introduction of the Law on Property Tax will add a number of taxable assets that are not land to ensure the fullest possible coverage of taxpayers’ contributions, ensuring Owners of property generated from some hidden income or illegal income are still obliged to pay taxes to the State.
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