Circular No. 03-TC-NN guiding the implementation of Circular No. 120-TTg dated December 30, 1963, of the Prime Minister on the policy to stabilize agricultural tax obligations for the years 1963, 1964, and 1965.

CIRCULAR

GUIDELINES FOR IMPLEMENTING CIRCULAR 120-TTG OF THE PRIME MINISTER ON THE POLICY TO STABILIZE AGRICULTURAL TAX OBLIGATIONS IN THE THREE YEARS 1963, 1964, AND 1965

The Prime Minister has issued Circular No. 120-TTg dated December 30, 1963 on the policy to stabilize agricultural tax obligations for the three years 1963, 1964, and 1965.

Below, the Ministry of Finance provides detailed explanations on certain points in the aforementioned circular and guides some implementation measures.

I. MEANING OF THE POLICY TO STABILIZE AGRICULTURAL TAX OBLIGATIONS

The policy to stabilize agricultural tax obligations, together with the policy to stabilize food obligation in the first five-year plan, was primarily formulated to benefit farmers, agricultural production, and the consolidation of agricultural cooperatives, while also ensuring the financial and food needs of the State.

In recent years, production increased, and farmers' living standards improved, but agricultural taxes did not increase. In the near future, conditions for production development and improvement in farmers' living standards will be better, but with this policy to stabilize agricultural tax obligations, taxes will still not increase, while the State must concentrate capital to initially build the material and technical foundations of socialism. This demonstrates the State's appropriate concern for farmers.

The policy to stabilize agricultural tax obligations, together with the policy to stabilize food obligations, will allow farmers to feel secure and enthusiastic about production, striving to expand acreage and increase rice yield and productivity, thereby improving their living conditions and contributing positively to the socialist industrialization process and the improvement of the entire population's living standards.

II. SPECIFIC CONTENT

1. Continue using the crop yield determined in 1958 to calculate taxes until the end of 1965:

The current tax yield is the annual yield that was declared stable since 1958.

Over the past few years, actual harvests of cooperatives and individual households have far exceeded the 1958 stable yield.

According to regulations, it should have been necessary to adjust the yield to match reality in 1961. However, with the policy to stabilize agricultural tax obligations, from now until the end of 1965, the yield stabilized in 1958 will continue to be used to calculate taxes. For cases where land plots of the same grade had different actual yields due to varying increases in productivity or changes in cultivation direction, there will be no adjustment to the annual tax yield.

From now until the end of 1965, only the yields of additional crops due to irrigation works that have ended their tax exemption period will be reassessed. In mountainous areas, additional crops will continue to be exempt from tax according to the ten policies encouraging production in mountainous regions.

2. Continue calculating taxes based on the 1961 tax rate for cooperatives and individual households until the end of 1965:

From now until the end of 1965, despite annual changes in land holdings or population size for cooperatives and individual households, the tax rate will remain unchanged. Therefore, for cooperatives or individual households without changes in area or tax yield, there will be no need to recalculate taxes. If there are changes in area or yield, taxes will be recalculated based on the previously established tax rate.

There are several specific cases for applying the tax rate as follows:

a) For cooperatives that newly admit members into the new members' tax yields will be added to the cooperative's total tax yield, then the tax will be calculated based on the previously established average tax rate of the cooperative.

b) For cooperative members who leave to operate individually, generally, they will be taxed based on their previous tax rate before joining the cooperative, regardless of changes in land holdings. However, those whose previous tax rate was lower than the cooperative's average tax rate or below the taxable threshold will now pay taxes at the cooperative's average rate.

The different policies for those entering and leaving cooperatives reflect the encouragement of collective farming through preferential policies for cooperatives.

c) For cooperatives that divide into smaller ones the tax rate of the larger cooperative will be applied to the smaller ones. In particular, if the economic conditions of the smaller cooperatives vary significantly after division, making it unreasonable to apply the former large cooperative's tax rate uniformly, the county administrative committee may allow the calculation of separate tax rates for each small cooperative, but ensuring that the overall tax level does not decrease compared to before the division. The method of calculating the tax rate is to divide the recorded tax revenue by the total yield of 1961.

d) For newly merged cooperatives the combined area, yield, and recorded tax revenue of the smaller cooperatives will form the area, yield, and recorded tax revenue of the larger cooperative. Based on the total recorded tax revenue and total tax yield of the new cooperative, a new tax rate will be calculated for application going forward (recorded tax revenue divided by total tax yield).

e) For individual households as well, generally, the tax rate will not be recalculated during the stabilization period. If households that previously relied on other occupations now switch to agriculture, their tax will be calculated based on the nearest cooperative's (place of residence) tax rate, rather than determining the household's tax rate according to the progressive tax schedule as before. In mountainous regions where the mountain agricultural tax regulation applies, the tax rate will be based on the ratio of recorded tax revenue to the total annual yield (before exemptions) of the nearest cooperative, rather than the tax rate after exemptions. If there is a division within a family, the tax rate of the original household will be used to calculate taxes for the new households.

3. Regarding Taxable Area:

Pursuant to Point 3 of Circular 120-TTg mentioned above, and according to Point 4 of the Agricultural Tax Regulation after land reform, only the following cases will be exempt from tax.

- Uncultivated land, abandoned land for justifiable reasons; state nurseries, agricultural and forestry experimental stations; sand dunes, barren hills planted with trees to prevent wind erosion and water erosion, etc. For paddy fields used for seedling cultivation, well-digging, irrigation ditch-digging to combat drought (small-scale irrigation), brick-making, tile-making, pottery, mold-making, sports fields, etc., areas that were exempt from tax before 1963 will continue to be exempt until 1965.

Accordingly, areas incorrectly exempted from tax under previous policies must be included in taxable areas. For example, if a paddy field is regularly used solely for seedling cultivation without rice planting, it was previously exempt from tax, but now if it is determined that the field can actually be planted with rice, it will not be exempt from tax; or if a paddy field designated for two-year tax exemption for seedling cultivation has been planted with one crop, only one year's tax exemption will apply.

- Paddy fields used for well-digging, irrigation ditch-digging, ponds, lakes that have been reclaimed after being filled with sediment and replanted... the replanted area must be included in the taxable area.

The specific extent of these areas must be determined so that from now until the end of 1965, regardless of whether cooperatives or farmers make efforts to replant and reasonably utilize the land, even if yields increase or if cooperatives or farmers change their usage direction and expand the area for such purposes, the State will neither increase nor decrease the taxable area. This provision aims to encourage cooperatives and farmers to use their land in the most reasonable and beneficial manner.

In the matter of tax exemptions, attention should be paid to:

1. Newly reclaimed land, land restored from abandonment and increased in yield through customary practices, which has reached the tax payment deadline, shall still apply the current regulations, meaning mountainous regions shall continue to apply Decree No. 410-TTg dated September 6, 1957 on ten policies to encourage production; in lowland areas, taxes shall continue to be calculated as they have been.

2. Land taken by the State for public construction projects or medium to large-scale irrigation works, or by cooperatives for drying yards and warehouses, shall be exempt from tax on the actual basic construction area that can no longer be cultivated, and this must be certified by the using authority regarding the area utilized. If any agency or unit occupies more land than necessary or occupies land without constructing within the specified period, affecting production negatively, then that entity must bear responsibility for paying tax on the improperly occupied area. As for cooperative drying yards and warehouses, the village administrative committee must confirm the actual area and include it in the cooperative’s basic construction plan.

4. Stabilizing the amount of agricultural tax payable in kind:

Regarding the stabilization of the amount of agricultural tax payable in kind, distinctions should be made as follows:

- For cooperatives and individual households mainly growing food crops, the entire agricultural tax should be paid in kind. The amount of agricultural tax payable in kind will be declared stable based on the absolute quantity recorded in the tax collection of 1963, after deducting the portion retained for the cooperative fund (low-level cooperatives: southern region 3%, mountainous region 4%; high-level cooperatives: southern region 5%, mountainous region 6%). For individual households, the stabilized amount of agricultural tax payable in kind is the total tax collected in 1963.

- For cooperatives and individual households growing both food crops and industrial crops, vegetables, flowers, etc., who have paid agricultural tax in kind in recent years, the stabilization level will be based on the amount of tax paid in kind in recent years, especially in 1962. If the tax level in 1962 was not accurate, it should be adjusted accordingly.

- For cooperatives and individual households mainly growing industrial crops, vegetables, flowers, etc., where the harvest of food crops is very small and the State still distributes additional food according to plans each year, they need not pay agricultural tax in kind, but may pay agricultural tax in kind of agricultural products purchased by the State and partly in cash.

After the amount of agricultural tax payable in kind is declared stable, adjustments will only be made for agricultural cooperatives and individual farming households whose food production situation changes significantly or suffers severe crop failure, to align the obligation to pay in kind with the actual situation. If tax increases due to new reclamation, restoration, increased yield reaching the tax payment deadline, or discovery of false declarations of area, the principle is that based on the time of stabilizing the tax level, cooperatives or households subject to tax payment in kind will continue to pay in kind; for example, if Cooperative A, primarily engaged in food crop production, now needs to pay an additional 50 kg of tax on five mu of newly reclaimed land for color crops reaching the tax payment deadline, this additional 50 kg of tax must be paid entirely in kind.

The amount of agricultural tax payable in kind is stabilized at an absolute quantity and applies throughout the year. Administrative Committees will distribute the amount to be paid during the dry and wet seasons based on the crop ratio of each locality, cooperative, and household.

III. ON GUIDANCE AND ORGANIZATION OF IMPLEMENTATION

To effectively implement the policy of stabilizing agricultural tax obligations, administrative committees of regions, cities, and provinces should focus on the following points:

1. It is necessary to pay special attention to educating cadres and the people, first and foremost cadres at the commune level, management boards of cooperatives, and cooperative members, to deeply understand the policy of stabilizing agricultural tax obligations, to thoroughly grasp both the demands of farmers and the State, to recognize the Party's and State's concern for farmers, while also fully recognizing the contribution obligations of farmers to the State. It is essential to link the policy of stabilizing agricultural tax obligations with the policy of stabilizing grain obligation requirements, with the movement to improve cooperative management and technology, clearly demonstrating the consistency between the short-term and long-term interests of the State and those of cooperatives and farmers, encouraging everyone to enthusiastically boost production for their own livelihoods, for the entire population, and to meet the requirements of socialist industrialization. Detailed discussions should be held, with reason and persuasion, to prevent cadres and cooperative members from concealing land areas to lower the level of agricultural tax obligations.

In leadership levels and relevant sectors, especially the finance sector, it is necessary to guard against the idea that stabilizing agricultural tax obligations is a simple matter, failing to fully recognize the difficulties and complexities of the issue, not seeing sufficiently the situation of false declarations of taxable area in many places over time, which has led to unfair and unreasonable contributions and caused budget losses for the State, thus lacking determination in identifying and correcting past errors to establish a solid foundation for stabilizing agricultural tax obligations.

2. Administrative Committees at provincial, municipal, and district levels need to closely lead and direct the implementation of the policy of stabilizing agricultural tax obligations, combining plans meticulously with important current rural tasks such as winter-spring crop production, grain procurement, and other agricultural products, particularly linking with the movement to boost production, improve cooperative management, and enhance technology. Attention should be paid to strengthening the financial resources of cooperatives through this stabilization of tax obligations. Guidance must be specific, proactive, strict, and timely. It is crucial to emphasize inspection and assistance to communes and cooperatives to promptly commend good individuals and deeds, disseminate experiences, and correct deviations. At the same time, regular reports should be made to help the Ministry understand the situation and provide timely guidance on stabilizing agricultural tax obligations.

Administrative Committees at provincial, municipal, and district levels need to utilize local administrative organizations and mass organizations, together with county-level Administrative Committees, to concentrate necessary cadres down to the grassroots level to discuss with commune-level Administrative Committees, commune cadres, cooperatives, and farmers, helping farmers to fully understand policies and directives, directing this work strictly and accurately according to the specific circumstances of each place.

Each province needs to organize pilot activities in one commune to draw lessons and develop detailed plans for implementation locally. Simultaneously, during comprehensive implementation, attention should be given to organizing key-point guidance to draw lessons for overall leadership, while also paying attention to monitoring, urging, and inspecting strictly.

3. The establishment of the 1963 agricultural tax ledger is very important because it serves as the basis for collecting agricultural taxes in 1964 and 1965. Doing this well will significantly reduce the workload of agricultural tax collection in rural areas in 1964 and 1965, allowing the policy of stabilizing agricultural tax obligations and grain obligations to better promote agricultural production.

The most critical aspect of the entire work of establishing the tax ledger and stabilizing agricultural tax obligations is accurately determining the taxable area. Therefore, it is necessary to concentrate leadership and cadres in this phase.

The establishment of the 1963 agricultural tax ledger according to the provisions in the Prime Minister's Circular must be basically completed before the Lunar New Year; if any place has already established the 1963 tax ledger but not in accordance with the aforementioned Circular, then it must be reviewed and corrected. While completing the collection and settlement of the 1963 winter agricultural tax, all places need to comprehensively grasp the 1963 tax amount, understand the situation of each cooperative, which ones perform well, which ones do not, and which have false declarations or errors in taxable area, many or few, to guide the upcoming inspection of taxable area. Additionally, it is necessary to understand the number of cooperatives that pay agricultural tax entirely in kind, partially in kind and partially in cash, and entirely in cash, to prepare for the upcoming announcement of stabilization.

4The method of implementation can be divided into several steps as follows:

The first step: Organize the dissemination of the policy of stabilizing agricultural tax obligations to ensure that cadres at all levels, management boards of cooperatives, cooperative members, and farmers fully understand the significance and importance of this policy, and encourage cooperatives and farmers to actively declare accurate taxable areas, assisting cadres in inspections and ledger establishment to achieve good results, serving as a basis to ensure fair and reasonable mobilization of contributions.

The second step: Determine the tax rate and taxable yield for each cooperative and individual farm household, combined with the inspection of taxable area.

- Determining the tax rate aims to review the tax calculation of cooperatives and individual farm households in 1963 to see if it aligns with the tax rate calculated in 1961 and whether it complies with the provisions of this guiding circular of the Ministry. If the current tax rate does not guarantee the 1961 and 1962 rates, it must be firmly corrected without being superficial. When calculating the tax rate, consider fractional amounts.

- Determining the taxable yield mainly involves reviewing the current average yield per hectare to see if it matches the declared stable average yield per hectare in 1958. If there is a discrepancy, it must be carefully studied to find the cause. In cases where the taxable yield decreases without a valid reason, it must be firmly corrected.

- Inspecting the taxable area requires two actions:

a) Verify the taxable area, identify and correct cases of underreporting or omission of taxable areas such as: reclaimed land, additional cultivation, reclamation of wasteland, increased crop rotation that has reached the tax liability deadline. Areas that have been measured must be taxed based on the new area.

b) Determine and clearly announce the exempted areas from before 1963 according to Article 4 of the Agricultural Tax Regulations after the Land Reform. Incorrectly exempted cases must be corrected.

Step three: After verifying the area, determining the tax rate and taxable yield, the Provincial Administrative Committee shall issue a decision announcing for each cooperative or individual farmer: the stable tax rate and average taxable yield per hectare from now until 1965, and specify the area of paddy fields, wells, ditches, etc., which will continue to be exempted from tax until 1965.

Based on the determined tax rate, taxable yield, and verified taxable area, proceed to establish the 1964 tax ledger, and adjust the tax level in kind if there are changes.

5. Timeframe for stabilizing agricultural tax obligations:

After the Ministry promulgates this Circular, the provinces shall immediately organize pilot work and arrange plans to implement the policy of stabilizing agricultural tax obligations at the local level, while urging the completion of the winter 1963 agricultural tax collection work. In places where the winter 1963 agricultural tax collection has ended, the policy of stabilizing agricultural tax obligations may be publicized, and the verification of taxable areas, determination of tax rates and taxable yields, and establishment of the 1964 tax ledger may be organized. By the latest May 1, 1964, localities must complete the declaration of stabilizing agricultural tax obligations, including the establishment of the 1964 tax ledger, to prepare for the temporary collection of the summer 1964 crop.

The Ministry hopes that the Administrative Committees of regions, cities, and provinces will carefully study this Circular and organize its implementation effectively.