Land Tax Report

Mekong Economics is proud to announce the publication of the “Vietnam 2023: Options for Property Tax Reform” policy paper, written by Mekong Economics’ Chief Economist Adam McCarty and International Economist Ferdinando Cinotto. 

Conceptualised in the context of Vietnam’s 2023 revision of the Land Law, this policy paper is a contribution to the burgeoning debate on Vietnam’s land and property taxation policies. The aims of the paper, methodologically achieved by leveraging insights from mainstream economic theory, relevant academic literature, and comparative international experiences, are (1) to describe the current status of the Vietnamese land taxation system, (2) to outline its significant issues in the areas of property taxation, property valuation, and land leasing, and (3) to propose appropriate policy reforms for the Vietnamese economy. 

Consequently, the policy paper pushes forward three significant policy reforms for Vietnam: first, a transition from Vietnam’s current system of lump payments for long-term land leasing to a new system of annualised, predictable, and stable taxation; secondly, the establishment of modern, technology-based methodologies of market-led property valuation; and third, the increase of property tax rates to a level of 0.5% ~ 0.75% of the market-assessed value.

In terms of reform implementation, the paper argues in favour of a comprehensive plan over a 15-year transitional period, as previously supported in a linked World Bank 2022 report. More specifically, the plan should employ monitorable key performance indicators, such as targets for property tax revenues, and piecemeal policy pilot schemes.

It is the authors’ hope that the proposed reforms will be taken up and discussed by policy stakeholders in Vietnam, so as to guide the current land taxation reform process towards more efficient, sustainable, and fair outcomes.