A lot of finance industry insiders have not agreed with the corporate income tax law amendment proposed by the Ministry of Finance (MoF), suggesting higher reductions, a recent conference in Hanoi heard.
The MoF proposal of 25 per cent corporate income tax, down from current 28 per cent, seems not to be appropriate and may hinder the country’s international competitiveness, the experts said.
Vietnam government should lower its corporate income tax (CIT) to 20 per cent-22 per cent, said lawyer Vu Xuan Tien at a recent conference, complaining that the MoF’s suggested changes to the Law on CIT are limiting, anachronistic and vague.
“If corporate tax will decrease by only 3 per cent, the government may have to cut it again in the future to keep up with falling tax rates in other countries,” Tien said.
Considering that the country now levies a personal income tax, a 25 per cent corporate tax would be a tax burden, said a financial expert at the conference held to discuss a MoF draft proposal on amending the 1997 law.
Others say steeper CIT cut may help prevent tax evasion and argue that the government needs not worry about lower tax revenues as the increasing number of business openings would offset the decrease in revenue.
Secretary General of the Vietnam Insurance Association Phung Dac Loc also agreed and said that common trend in Asia is to reduce corporate taxes to attract foreign investors.
Singapore, which is considered very favorable, decided to lower their CIT from 20 per cent to 19 per cent while China gave corporations an 8 per cent break, from 33 per cent to 25 per cent.
At the conference, Truong Thanh Duc said the finance ministry’s draft was too vague and general to serve as an amendment.
The draft should incorporate as many of the relevant issues addressed by the existing resolutions and circulars as possible, Duc added.
Duc warned Vietnamese lawmakers that depending on resolutions and circulars to clarify laws would always alienate the public.
The National Assembly will review the draft on amending the 1997 law this year. (Young People)
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