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NA deputies back tax cuts to attract investment

Update: May, 30/2013 - 11:20

HA NOI(VNS)— A majority of National Assembly (NA) deputies were in agreement that some amendments should be made to the existing Law on Corporate Income during discussions held yesterday in the capital as the NA's thirteenth session continued.

It has been argued that such changes are necessary in order to help businesses steer out of difficulty and to lure investment to new business ventures.

Deputies Nguyen Thi Kim Be, Nguyen Ba Thuyen, Mai Huu Tin and Tran Du Lich all agreed with a draft proposal that would see tax rates slashed for businesses. The draft suggests that from 2014 to 2015, a general tax rate of 22 per cent should be applied to businesses, a reduction from the current 25 per cent rate.

The draft also states that enterprises employing fewer than 200 employees and generating no more than VND20 billion (US$952,000) per year should be subject to a rate of 20 per cent.

It added that those paying the 22 per cent would then be subject to a new, lower tax rate of 20 per cent from January 2016.

Deputies said that the new regulation of the draft bill is in line with global tax reform trends and the national strategy on tax reform, which aims to implement streamlined administrative procedures for tax payers and modernise tax management.

However, some argued the tax rate reduction proposed by the draft bill was still not enough. Deputies Nguyen Thi Nguyet Huong and Do Van Ve suggested the NA lower the tax rate to 20 per cent regardless of business scale.

Deputy Nguyen Thanh Thuy said that tax rates should be slashed to 18 per cent for start-up businesses.

Regarding the limit of spending on advertising, deputy Nguyen Thi Kim Be said she agreed with the draft bill to raise deductible expenses from taxable income from 10 per cent to 15 per cent of total business costs on marketing, promotion, brokerage commissions, reception expenses, conferences, marketing supporting fees and other production costs.

Be suggested a gradual lift in the limit of spending on advertising to align with international rules and said that any spending limit should be based on total revenue rather than on total business cost.

Deputy Phung Duc Tien said deductible expenses of advertising costs should be calculated based on the sector of the business and the timing and duration of the advertising. He suggested that the NA further slash deductible expenses for the service sector ahead of other sectors.

NA deputies also spent time discussing taxable income and non-taxable income for wholly State-owned companies, so as to handle the bad debt of domestic credit institutions. They also aimed to clarify the taxable income for the transfer of real estate.

National Defence

In another meeting yesterday, NA deputies held a discussion about the draft Law on Education of National Defence-Security, which is scheduled to be ratified on June 19.

Some proposed that courses educating about national defence and security be introduced to students at all levels, from primary to university, including those who have returned to Viet Nam after being trained abroad.

However, the courses should not be made compulsory, particularly at primary schools, otherwise they will create too much work for students, according to deputy Ngo Thi Minh from northern Quang Ninh Province.

Some of her colleagues suggested providing national defence and security knowledge not only to employees and employers at State-owned bodies and organisations, but also to staff at non-State enterprises and units as well. — VNS

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