Law makers on April 16 backed the Government’s proposal to reduce
the current general level of enterprise income tax to 22 percent in an
effort to boost investment in Vietnamese businesses.
The issue was
discussed at a session of the National Assembly Standing Committee, and
it was agreed that the 3 percent drop in tax would be an effective
measure to support struggling enterprises.
The deputies also
agreed to set an enterprise income tax rate of 20 percent for small and
medium enterprises, while businesses working in the social housing field
will be taxed 10 percent.
Expanding investment projects will also
qualify for preferential tax rates based on the scale of cash injections
and the project regulations in each region.
Some participants in
the discussions called for the tax reductions to come into force from
the beginning of July this year rather than January 2014, as proposed by
the Government, in a bid to solve difficulties facing the business
community as soon as possible.
However a full resolution has yet to be agreed and so the date of implementation will be set in the near future.
NA Chairman Nguyen Sinh Hung and Law Committee Chairman Phan Trung Ly
said that implementing preferential tax rates for enterprises was a
positive measure, but warned that tax reductions should only be made in
combination with adjustments to income tax and value added tax (VAT)
laws that will be submitted to the NA for approval next May.
Other
fields facing economic struggles, including agriculture, aquaculture and
forestry in mountainous and island areas could also receive
preferential tax rates in the near future, Hung added.
The
Government has estimated that the State Budget will lose nearly 2.65
trillion VND (around 126 million USD) due to the approved tax
reductions.
Some deputies remain concerned that the 2.65 trillion
VND support package will not be effective, with Deputy Minister of
Finance Vu Thi Mai arguing that the measure will add unnecessary extra
pressure to the State Budget.
“The budget collection in the first
quarter of 2013 was equal to 20.6 percent of this year’s target, which
is between 3-5 percent less than the rate received in previous years,”
said Mai.
Other deputies called for a range of short term and small
scale support packages to be implemented alongside other policies in
order to further help enterprises overcome difficulties.-VNA