Finance Minister: Vietnam to Build up Flexible Tax Policy

 

In general, personal income tax payers will have more advantages than those who have to pay tax for their high income because the tax collection was not previously exempted for people who have dependants, which means that the family background conditions based on which the law on high income tax is calculated were not considered. In addition, the initial tax payment is lowered to 5 per cent from 10 per cent. The highest tax payment is slashed to 35 per cent from 40 per cent.

There are two kinds of personal income tax which need to be regulated. That is, regulating capital gain from share dividends, and regulating securities transactions conducted on the market. In fact, the collection from capital gain tax is not accounted for much. For example, profitable dividends will be imposed with a tax of 5 per cent, while securities investors will choose to pay 20 per cent on their profit or 0.1 per cent on each transaction conducted.

 

Currently, securities players have to pay 0.3-0.4 per cent on the value of each transaction for the securities firms, so the levy of 0.1 per cent of the personal income tax is accounted modestly for them. However, the tax imposition will not have a positive impact on the stock market, so the Ministry of Finance has recently asked the government to delay the tax.

 

The Prime Minister has no authority for the stop, delay or exemption of the tax. I have also suggested the government assigns the Ministry of Finance to report to the Standing Committee of the National Assembly for further consideration. That is the first solution. The second measure is that the government will calculate the tax by the end of the year so that investors who have profits from their investment will have to pay tax. If they suffer loss, they will not have to pay tax.

 

This is a temporary solution. The government may re-consider the plan to report to the National Assembly.

 

The economic slowdown actually has impacts on the state budget revenue. However, the government will still have to arrange its targets properly. The top priority of the government is still to ensure social security.

Policies which have been promulgated, or put into the plan of the government and the National Assembly must be carried out. In addition, we can also mobilise capital source from the society.

 

At present, the Ministry of Finance has developed a wide range of measures corresponding to the falling price of crude oil to choose flexible policies. For example, if the price keeps falling, which will shrink the state’s budget receipt, we have to review expenditure to reduce unnecessary expenses. In addition, we also have to actively explore other sources of income, avoid income loss and tax debt in order to ensure a healthy budget.

 

Moreover, the government has also discussed specific plans and is mobilising funds from various resources. The government may issue more g-bonds for investment, or find other sources for investment through preferential interest rate.

 

Recently, the government has provided non-interest rate loans for enterprises to purchase rice and paddies from farmers. The state has lent its hands to help recover the rice market and support the farmers’ lives, so the price of rice has immediately increased.

 

This is also a national benefit because, in the context of current falling prices in the world market, it is better if we store rice and wait for high prices instead of exporting currently.