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Assembly cuts corporate income tax

Update: June, 20/2013 - 09:41
Students and workers are interviewed at a job fair in HCM City. National Assembly deputies discussed the draft law on employment yesterday. — VNA/VNS Photo Phuong Vy

HA NOI (VNS)— National Assembly deputies yesterday adopted four laws, one of them will regulate a lower corporate income tax from neVNSxt year.

With the backing of 91.57 per cent of the deputies, the revisions to several articles of the Law on Corporate Income Tax will reduce the tax from the current 25 per cent to 22 per cent from January 1, 2014 and 20 per cent from 2016.

Enterprises with an annual income of less than VND20 billion (US$952,000) will be subject to the reduced 20 per cent corporate income tax from next year.

Enterprises involved in exploiting and searching for oil, gas and other valuable natural resources in Viet Nam will be charged from 32 to 50 per cent, depending on the scale of the project.

One important regulation approved yesterday was that enterprises that suffer losses will be allowed to carry forward their losses to the next year, which will also be deducted from the corporate income tax.

More than 91 per cent of deputies also agreed with revisions to several articles of the Law on Value-Added Tax, which include a regulation on tax-free goods and services for export, international logistics and exports that qualify for zero value-added tax.

The law also lowered the tax on the purchase, hire and rent of social housing from 10 per cent to five per cent in accordance with the 2005 Law on Housing. The National Assembly Standing Committee said that the tax would create more favourable conditions for middle and low-income people to access to social housing.

The law will take effect from April 1 next year, except for the regulations on social housing tax which will take effect from July 1 this year.

During the afternoon session, the deputies also approved the Law on National Defence and Security, the Law on Education and the Law on Natural Disaster Prevention and Relief.

Under the latter, a fund for natural disaster prevention and relief will be established at district levels using money collected from domestic and foreign economic organisations and Vietnamese citizens over the age of 18, as well as other legal sources.

Employment Law

Yesterday morning the deputies discussed the draft law on employment, during which they agreed on the necessity of creating a good working environment and conditions for all workers to earn a good income.

A report at the session estimated that only 33 per cent of workers in the country receive a regular salary, and 67 per cent do not have formal employment agreements.

Most of the deputies agreed to move the regulations on unemployment insurance from the Law on Social Insurance to the draft Employment Law. Some suggested extending the insurance to those who do not have employment agreements.

"They account for a large part of the workforce and are vulnerable," said Nguyen Thi Phuc from the central province of Binh Thuan. "We need to ensure their employment rights as the labour market develops."

However, Phuc admitted that it would be difficult to implement due to a lack of man power to clarify those who were eligible for the fund.

She suggested extending the law to workers with seasonal contracts or those who work between 3-12 months.

In contrast, some deputies said that the draft law should regulate unemployment insurance in the same way as the compulsory social insurance.

Le Thi Yen from the northern province of Phu Tho said that careful research was needed before regulations were drawn up to classify different groups of labourers under the draft employment law.

"With nearly 67 per cent of workers without employment agreements, I think it would be impossible for authorities to keep track of their incomes and employment statuses due a lack of human resources," she said. — VNS


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