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Housing Tax Law draft still full of holes
The Ministry of Finance, now compiling the housing tax law, admits that state management agencies still cannot determine how many houses and land plots individuals and households have, so it is very difficult to determine correct tax sums.
Which agency grants certification?
In HCM City, many real estate sellers still have to pay personal income tax, though the current laws stipulate that sellers do not have to pay tax if a sold property is their only real property.
In fact, tax agencies in HCM City will exempt the tax if real estate sellers draw up a document, swearing that they have only one real property.
However, the regulation is applied only to those sellers who have sold houses written down in ho khau (residence registration books). In other cases, they have to get a document from state management agencies confirming that they have only one real estate asset.
It proves to be impossible to get the document, because HCM City still does not have a database with updated information about local residents
Chairman of the Da Kao ward People’s Committee Nguyen Duy An said that the People’s Committee dares not make certify people, because it does not know how many real estate assets people have.
The Urban Management Agency in district 1, HCM City, also said that it only knows of cases in which people have two real estate assets in the same district, provided that the real estate assets have red books (land use right certifications) already.
The HCM City Department of Natural Resources and the Environment also refuses to give confirmation, saying that it would not know if people had real estate assets which are located in other cities or provinces.
In fact, for many years, real estate transactions have not been going through any state management agencies. Only sellers and buyers follow contracts they sign, while they do not pay tax to the state, even though they may be selling real estate assets worth several billion VND.
Tran Thi Le Nga, Head of the Propaganda and Tax Payer Support Division under the HCM City Tax Agency, said that tax agencies have been relying on people’s honour, why they still cannot discover tax evasion cases and collect tax arrears.
The legal loopholes
What worries people most is that the draft housing tax law does not fix the existing problems.
The Ministry of Finance, though admitting that it is very difficult to determine the number of houses and land plots of every individual to calculate taxes, has only set the task of ‘building up a database to serve tax collection management’. The ministry said that in order to minimise tax fraud, it is necessary to rely on the cooperation of relevant ministries including the Ministry of Natural Resources and the Environment, Ministry of Construction, and local authorities.
Former Deputy Minister of Natural Resources and the Environment Dang Hung Vo said that if the database is not built and people are not forced to make transactions through real estate trading floors, honest people will be put at a disadvantage.
VietNamNet, TP
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