Property tax reform in Vietnam: Options, direction and evaluation

• Published in: Land use policy Vol. 30; no. 1; pp. 276 - 285
• Main Authors: McCluskey, William J., Trinh, Hong-Loan
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier Ltd 01.01.2013; Elsevier
• Subjects: Animal, plant and microbial ecology; Applied ecology; Biological and medical sciences; cities; Economic development; Finance; Fundamental and applied biological sciences. Psychology; funding; income; Infrastructure; Land; Land tax; Land utilization; Land values; Local government; Oryza sativa; Productivity; Property; Property tax; Property taxation; Revenue; rice; Taxation; Vietnam; Vietnam; Asia; South east Asia; Vietnam; Property taxation; Land tax; Finance; Environmental policy; Tropical zone; Tax; Taxation; Land use
• ISSN: 0264-8377; 1873-5754
• DOI: 10.1016/j.landusepol.2012.03.007

► Analysis of the current state of property taxation in Vietnam. ► We identify many of the structural problems affecting provincial and local government finance. ► The research supports the government's proposal towards the development of a land tax. ► We are critical of several of the main components of the land tax. Vietnam has seen significant economic growth over the past decade resulting in the need to develop solutions to finance infrastructure in its cities. Own revenue sources for cities are largely based on fees and charges and a form of property taxation from agricultural and non-agricultural land which is based on rice productivity. This paper analyses current land based revenue sources and concludes that these sources are unsustainable, lack buoyancy and represent a declining revenue base. Whilst the paper advocates a recurrent property tax based on land values empirical analysis provides some evidence that the government's proposal for a land based tax has several structural problems that will directly affect revenue buoyancy. However, the proposed land tax is at least a positive and important step in developing a sustainable revenue source for city and local governments.