Tuesday, December 12 2017

VietNamNews

Ministry wants to lift income-tax threshold

Update: August, 09/2012 - 10:28

 

A daily scene at the tax office in HCM City's District 3. — VNA/VNS Photo Thanh Vu
HA NOI — The Ministry of Finance has asked the Government to increase the personal income tax threshold to VND9 million (US$429), 2.25 times higher than the current level.

Deductions from each dependent of a taxpayer would also double from VND1.6 million ($76) to VND3.2 million ($152). This means an individual who has one dependent and earns a monthly salary of less than VND12.6 million ($581) would enjoy tax exemption.

These are part of the ministry's amendments to the Law on Personal Income Tax which was approved by the National Assembly on October 21, 2007, and came into force in 2009 with seven tax brackets, the highest set at 35 per cent for taxable income of over VND80 million ($3,800).

In March, the ministry introduced a draft amendment to the law as the low threshold had caused taxpayers difficulties in coping with inflation and increasing prices over the last three years.

The highest tax rate would also be reduced to 30 per cent for taxable income of over VND52 million ($2,500) .

However, concerns remain because previous amendments were only scheduled to take effect as of 2014, and may by then be outdated.

The ministry expects the amended law to be approved by the National Assembly later this year and to take effect next July. The Government has also asked the National Assembly Standing Committee to adjust family deductions in case of market price fluctuations of more than 20 per cent.

According to the ministry, last year there were 3.8 million personal income taxpayers in Viet Nam, contributing 5.5 per cent to the State revenue.

If the proposed family deduction is applied, 70 per cent of taxpayers will be tax exempt.

Lawyer Vu Xuan Tien, chairman of Value of Finance ond Management Consulting Company, said that it was reasonable to increase the tax threshold because it could help reduce the number of taxpayers and tax collection costs.

However, he was unsure if the threshold would become outdated like the existing level.

Former deputy head of the Taxation General Administration Nguyen Thi Cuc said that the range between the lowest tax bracket and the highest remained narrow, and much less than in neighbouring countries. — VNS

Send Us Your Comments:

See also: