According to the draft submitted early this month, homeowners would have to pay an annual house tax of 0.03 percent of the assessed value, which is based on total construction costs. Houses built for VND500 million (US$27,901) or below will be exempt from this tax.

“With the current per capita income (less than $1,000 a year) the housing tax shouldn’t be levied within the next ten years,” Ho Chi Minh City representative Tran Du Lich said.

Hanoi’s representative Nguyen Thi Nguyet Huong agreed with Lich and suggested more thought be given to the draft before it is put into effect.

Meanwhile, representative Ngo Van Minh from the central province of Quang Nam, said, “We should never ask those who only own one house to pay tax”, as people have already paid taxes when buying constructional materials.

Many deputies also said that to effectively curb property speculation, the stated aim of the draft on housing taxes, the draft should target those who own more than two houses.

Tax rates on housing area should also be increased, as the proposed one wasn’t high enough to deter land speculation, said deputy Truong Xuan Quy from the northern province of Tuyen Quang.

According to the draft, housing area exceeding an official threshold fixed by localities by less than three times would be taxed 0.06 percent a year. Housing areas that exceed this proportion will attract taxes of 0.09 percent per year.

If the housing area did not exceed the official threshold, owners would pay 0.03 percent of their housing value as tax every year a year.

“The (proposed) tax rates are too low to curb land speculation, especially for land left idle,” said Le Dung NA deputy from the Mekong Delta province of Tien Giang.

The new tax system is set to take effect in 2011, after approved by the next National Assembly, which is expected to happen by May next year. There is currently no housing tax in Vietnam.

Also on Saturday representatives expressed approval of the draft Commercial Arbitration law which would allow arbitrator councils to employ interim measures, especially when dealing with disputes relating to perishable goods.

Current regulations still have loopholes, allowing many companies to delay abiding by decisions made by commercial arbitrators or bring cases to court whenever the decisions of the arbitrators do not satisfy them, said Tran Huu Huynh of the Vietnam Chamber of Commerce and Industry.

Over the past six years, four out of 280 cases tried by commercial arbitrators have been rejected by the courts, while this has never happened in other countries for tens or even hundreds of years, Huynh said.

“It’s not because our arbitrators are incompetent, but because our regulations [still have loopholes],” he said.

Lawyer Nguyen Dang Trung, chairman of HCMC Lawyers’ Association, agreed with Huynh, stressing that “arbitrators’ decisions must be recognized by the court.”

Source: Thanh Nien, Tuoi Tre