Corporate income tax likely to be cut by 5 percent: congressman

The National Assembly’s (NA) Finance and Budget Committee has suggested further corporate income tax cuts to 20 percent, much lower than that at many regional countries, the chair of the committee told Saigon Tiep Thi newspaper.

Taxes are on a decline in general, said the chairman Phung Quoc Hien, adding that corporate income tax which stood previously at 32 percent has been lowered to 28 percent and 25 percent recently.

The adjustment is expected to come in 2012 or 2013 during the roadmap of law making.

The total tax collection for the state budget is projected to gain VND612 trillion this year, up 16.7 percent over 2010’s estimates, mostly thanks to increased collection from land, non-state sector and export-import taxes which have significantly picked up by the year-end, according to the Ministry of Planning and Investment.

But since 2011 has been a tough year for the majority of businesses, especially small and medium-sized ones struggling with a variety of hardship that could last through 2012, increasing state budget collection would then mean dealing with state budget losses and smuggling rather than taxation on businesses, Hien said.

Regarding other types of taxes, he said that value added tax would be adjusted so as to be in line with the international practices.

Also, personal income tax should be calculated on the minimum wage rather than fixed family allowances for dependents. As such, family allowances would be easily adjusted so as to reflect the reality on adjustments of minimum wage.

These basic changes are expected to come early so as to facilitate the restructuring of the economy.

For instance, apart from corporate income tax relaxation, the policy on tax exemption and reduction should be applied to disadvantaged areas to redirect investments to those places.

Budget collection from the non-state owned enterprises needs enhancing due to substantial budge losses incurred from this sector.

However, the results of investigation and auditing in many large state-owned enterprises and corporations revealed similar considerable amounts of reclaimed taxes.

Generally speaking, unlike the non-state sector, accounting activities are fairly complete in state-owned businesses. Moreover, auditing and investigation have been carried out in state-owned enterprises only.

In fact, state-owned enterprises' contribution to state budget is limited, yet has increased significantly recently.

Fuel tariff to be regulated flexibly

The Vietnamese Ministry of Finance has recently said that fuel tax should be regulated flexibly and the fuel tariff in 2012 may be range between 0-40 percent in accordance with World Trade Organization's (WTO) commitment.

The Price Management Department under the finance ministry has recently sent document replying to general Department of Vietnam Customs about planning the tariffs for some goods subject to preferential tariffs in 2012, including petroleum.

Particularly, the Customs agency said that the tariff for petroleum products in 2012 would be kept stable like currently at 0.5 percent.

However, price manager said that fuel tax should be adjusted flexibly.

In addition, the tax rate is applied for the whole year 2012, so the plan should range between 0-40 percent as committed with WTO.

Source: TT