Construction ministry mulls extension of tax incentives for low-cost housing

Laws - Ministry of Construction has proposed the government to extend incentives of Value Added Tax (VAT), Corporate Income Tax (CIT) as for projects of developing housing for low-income workers and earners generally, the local newswire VnExpress reported on Dec 16.

Previously, the government made a decision that owners of cheap housing projects for low-income earners in industrial zones and urban areas are levied with the highest VAT incentives and subjected to CIT exemption. However, the incentives are only applied on balance sheets of 2009.

The ministry said the government needs to continue implementing the aforementioned tax incentives because they [incentives], if not imposed, will affect strongly to the calling for economic sectors to join investment as well as investment efficiency and capital turnover of enterprises.

Also, Prime Minister was proposed to assign Ministry of Finance to continue researches, recommendations or reports for submission to National Assembly with an aim to add VAT and CIT incentives for housing investment projects in urban areas.

Currently, the country has 24 housing projects for workers in industrial zones, which have been kicked off with total investment cost of estimated 2.6 trillion dong. Once finished, the projects will help provide accommodations for about 125,000 workers. Regarding cheap housing for low income earners in urban, Vietnam has total 37 projects being started, amounting to 3.6 trillion dong.