Ministry proposes cut in corporate tax, but hikes for other taxesVietNamNet Bridge - The Ministry of Finance’s (MOF) recent proposals on raising many kinds of taxes and fees have been facing strong opposition from the public. In August 2017, MOF stirred up the public when proposing to raise the VAT (value added tax) from 10 percent to 12 percent and cut the number of products subject to the preferential VAT rate of 5 percent, because the 10 percent tax rate ‘isn’t in line with international practice’ and ‘cannot ensure the nation’s financial security’. According to OECD (The Organisation for Economic Co-operation and Development), the tax brings 4 percent of revenue in Canada, 3 percent in the US, and 0.6 percent in developed countries.However, Vietnam’s annual income per capita is very modest, just around $2,000.“Raising the tax on workers with low living standards may turn the near-poor into the poor, and turn low-income earners into near-poor,” said Bui Duc Thu, a National Assembly deputy.The real reason behind MOF’s decision to propose a tax hike is to increase the source of revenue for the state budget. However, as Ngo Tri Long, a renowned economist, said, the high public debt and prolonged budget deficit must not be blamed on low tax collections but on embezzlement, inappropriate investments, and loose financial discipline.“If the problems aren’t settled, the budget deficit will still occur even if MOF raises taxes many times,” he said. RELATED NEWSInvestors happy about new cut in corporate income taxIgnoring protests, Finance Ministry raises environmental tax on petrol productsM. Ha

Source: VietNamNet News May 03, 2018 09:45 UTC