Circular No. 4129/TC/TCT regarding the adjustment of land categories for agricultural land use tax

LETTER

OF THE MINISTRY OF FINANCE NUMBER 4129 TC/TCT DATED APRIL 29, 2002
OF THE MINISTRY OF FINANCE ON AMENDING LAND CLASSES FOR AGRICULTURAL LAND USE TAX
USE OF AGRICULTURAL LAND

RESPECTFULLY SUBMITTED TO: PEOPLE'S COMMITTEES OF PROVINCES AND MUNICIPALITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT

IMPLEMENTING LETTER NO. 145/CP-NN DATED FEBRUARY 5, 2002 FROM THE GOVERNMENT PERMITTING SOME LOCALITIES TO AMEND LAND CLASSES FOR AGRICULTURAL LAND USE TAX BASED ON LARGE STATE INVESTMENTS IN IRRIGATION INFRASTRUCTURE, WHICH ENHANCE AGRICULTURAL PRODUCTION EFFICIENCY AND PROMOTE CROP STRUCTURE ADJUSTMENTS, NECESSITATING APPROPRIATE CLASSIFICATIONS; TO ENSURE THE AMENDMENT OF LAND CLASSES FOR AGRICULTURAL LAND USE TAX IN ACCORDANCE WITH THE PRIME MINISTER'S DIRECTIVES AND CONSISTENT WITH GUIDELINES ON LAND CLASSIFICATION SET FORTH IN GOVERNMENT DECREE NO. 73/CP DATED OCTOBER 25, 1993, CIRCULAR NO. 92 TT/LB DATED NOVEMBER 10, 1993 OF THE MINISTRY OF FINANCE AND AGRICULTURE (NOW THE MINISTRY OF AGRICULTURE AND RURAL DEVELOPMENT), THE LAND MANAGEMENT COUNCIL (NOW THE LAND ADMINISTRATION COUNCIL) AND LOCAL REAL ESTATE CONDITIONS, THE MINISTRY OF FINANCE GUIDES IMPLEMENTATION AS FOLLOWS: 1. CASES REQUIRING AMENDMENT OF LAND CLASSES FOR AGRICULTURAL LAND USE TAX:

a) AREAS WITH LARGE STATE INVESTMENTS IN IRRIGATION INFRASTRUCTURE SUCH AS CONSTRUCTION OF RESERVOIRS AND CANALS, RESULTING IN SIGNIFICANTLY HIGHER CROP YIELDS THAN BEFORE OR DEGRADED LANDS WHERE SLOW STATE INVESTMENT HAS CAUSED LOW CROP PRODUCTION. b) AREAS WITH STATE INVESTMENTS THAT FACILITATE THE TRANSITION TO HIGH-YIELD CROPS.

c) BORDERS OF VILLAGES AND COMMUNITIES WITH SIMILAR LAND CONDITIONS AND CROP STRUCTURES BUT UNREASONABLY DIFFERENT TAX CLASSES; PRIOR CLASSIFICATIONS WERE INACCURATE, LEADING TO MANY FARMHOUSEHOLDS' COMPLAINTS.

AMENDMENT OF LAND CLASSES FOR AGRICULTURAL LAND USE TAX MUST ENSURE THAT CHANGES ARE NOT UNCONTROLLED AND FOLLOW THE PROCEDURES SET OUT IN GOVERNMENT DECREE NO. 73/CP DATED OCTOBER 25, 1993 AND CIRCULAR NO. 92 TT/LB DATED NOVEMBER 10, 1993.

2. PEOPLE'S COMMITTEES OF PROVINCES AND MUNICIPALITIES DIRECTLY UNDER THE CENTRAL GOVERNMENT SHALL INSTRUCT TAX AUTHORITIES AND RELATED DEPARTMENTS TO IMPLEMENT:

a) IN VILLAGES WHERE LAND CLASSES NEED AMENDING, ORGANIZE PUBLIC DISSEMINATION ON THE PROCEDURES FOR CLASSIFYING LANDS SO THAT CITIZENS CAN UNDERSTAND AND PROVIDE FEEDBACK; PROPOSED CHANGES TO TAX CLASSES MUST BE ANNOUNCED AT LOCAL GOVERNMENT OFFICES FOR PUBLIC COMMENT BEFORE SUBMISSION TO HIGHER AUTHORITIES.

b) AFTER AMENDING LAND CLASSES, THE PEOPLE'S COMMITTEE OF THE PROVINCE OR MUNICIPALITY SHALL REVIEW AND REPORT TO THE PRIME MINISTER AND THE MINISTRY OF FINANCE. ADJUSTED TAX CLASSES WILL BE USED AS A BASIS FOR CALCULATING TAXES FROM THE DATE THE DECISION TAKES EFFECT.

c) IMPLEMENTING RESOLUTION NO. V OF THE PARTY CENTRAL COMMITTEE (TERM IX) ON FINANCIAL AND CREDIT POLICIES "EXEMPTING AGRICULTURAL LAND USE TAX UNTIL 2010 FOR FARMHOUSEHOLDS". THEREFORE, WHERE DETERMINATION OF AGRICULTURAL LAND USE TAX IS IMPACTED BY UNRESOLVED COMPLAINTS ABOUT LAND CLASSES, AMENDMENTS SHOULD BE MADE PROMPTLY IN 2002; OTHER CASES SHALL BE CONSIDERED GRADUALLY. AMENDMENTS MUST PROCEED CAUTIOUSLY AND BE ACCOMPANIED BY PUBLIC INFORMATION CAMPAIGNS ON THE PRIME MINISTER'S POLICY TO ENSURE THAT RECLASSIFICATIONS ACTUALLY ENCOURAGE FARMERS TO COLLABORATE MORE EFFECTIVELY IN AGRICULTURAL PRODUCTION. IN villages that need to adjust the land classification for tax purposes shall organize dissemination of the procedures for land classification so that the people understand and provide comments; the expected results of adjusting the agricultural land tax classification at the village level must be announced and publicly posted at the People's Committee office in each commune for public opinion before the commune People's Committee submits to the district People's Committee and the District Tax Advisory Council for review.

b) After adjusting the land classification, the provincial or centrally-administered city People's Committee shall examine and approve, then submit a report to the Prime Minister and the Ministry of Finance. The adjusted tax land classification serves as the basis for calculating taxes starting from when the decision on the adjustment takes effect.

c) Implementing Resolution No. V of the Central Party Committee (Term IX) on financial policy - credit "Exempt agricultural land use tax up to 2010 for farming households". Therefore, in places where determining the amount of agricultural land use tax is affected and there are unresolved issues regarding objections to land classification, adjustments should be made promptly in 2002. Other cases shall be reviewed gradually. The adjustment must be carried out cautiously step by step, combined with organizing publicity through mass media about the Prime Minister's policy on adjusting the agricultural land tax classification to ensure that reclassifying the land for taxation truly encourages farmers to unite and enthusiastically produce more efficiently.