The draft amended Corporate Income Tax Law says the current
tax rate of 25% will be lowered to 23% on January 1, 2014, when
the law is expected to take effect. Only the enterprises having
fewer than 200 employees and earning less than VND20 billion
per year will enjoy a tax rate of 20%.
The wide corporate income tax will be brought down to 20%
sometime between 2016 and 2020, says the draft law.
However, NA Chairman Hung questioned: “Why not cut the tax to 23% in 2014 and 20% right on January 1, 2016? Can the
Ministry of Finance announce such a schedule?”
“If I were the finance minister, I would slash the tax to 20% right away,”he stated at a meeting of the NA Standing Commit-
tee in Hanoi on Monday.
Deputy Minister of Finance Vu Thi Mai explained the State budget would earn VND6 trillion less with every percentage
point of corporate income tax reduced. In other words, the central budget revenue would decline VND30 trillion if corpo-
rate income tax was lowered by five percentage points.
However, Hung did not agree with this explanation. He stressed what matters is not howmuch the budget would lose, but
which impacts tax cut would have on production and business activities, such as how it would stimulate production and
how enterprises would expand their operations.
Echoing Hung’s view, Phung Quoc Hien, chairman of the NA Finance and Budget Committee, said the tax reduction sched-
ule must offer enterprises the best conditions, stimulating their production and business activities.
High State budget revenue should be based on good production and business, rather than high tax rates, he said. Thus, he
suggested reducing corporate income tax to 20% for Vietnam to compete with other countries in the region in investment
attraction and using other sources to make up for State budget revenue loss.
Local News
HANOI – Chairman Nguyen Sinh Hung of the National
Assembly (NA) wants the Ministry of Finance to slash
corporate income tax on all enterprises to 20% on January 1,
2016 so as to make the domestic business environment more
competitive.
Tax incentives for EZs need second thought
State agencies discuss proposed amendments to the
Corporate Income Tax Law
NA Cha i rman Wants Corporate Income Tax
Reduced To 20%
The draft amended Corporate Income Tax Law stipulates a preferential tax rate of 10% in the first 15 years for new inves-
tors in economic zones (EZs) and hi-tech parks, and producers of new materials. Disadvantaged localities can apply the
rate of 20% in the first 10 years, before normal rates apply nationwide.
The NA Finance and Budget Committee requested the Government to reconsider tax incentives for investors in EZs, say-
ing that the number of EZs established in recent years was quite large. The committee suggested investors should be
given incentives according to the locality they are operating in, whether it be in an EZ or not.
The Government was also asked to review the preferential policies for agriculture and rural development, especially sea-
food farming and fishing. Chairman Hung suggested a tax rate of 10% for the projects in rural areas and tax exemption
for those in disadvantaged areas.
(Source: The Saigon Times Daily)
1,2,3,4,5 7,8