Vietnam Plans to Lower Corporate Tax to Boost Investment

Vietnam’s National Assembly plans to lower corporate income tax to 25 per cent from 28 per cent to create more incentives for investment from 2009 as the country needs to maintain the sustainable economic development, state media said on March 27.

 

“The National Assembly’s Standing Committee will slash VND5 trillion (US$312.5 million) a year, or 13 per cent of the State budget’s incomes from corporate income tax (excluding the value of crude oil), but will help make the investment environment more attractive,” Minister of Finance Vu Van Ninh said.

 

Phung Quoc Hien, chairman of the NA’s State Budget and Finance Committee said the tax slashing will help boost investment.

 

The move is expected to become effective from Jan 1 next year, the local Young People newspaper said.

 

According to NA Deputy Chairman Uong Chu Luu, Vietnam will have an estimated 500,000 enterprises by 2010, therefore, a tax rate cut does not mean a reduction in State income.

 

At a time when the economy is facing many challenges, CIT tax rate reduction will help create a favorable investment environment and facilitate businesses’ production and trade, members of the NA Standing Committee said.