NA pushes swift and big tax slashes

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Under the revised draft on Corporate Income Tax (CIT), a common rate will be 22 per cent instead of current 25 per cent and will begin to take effect on January 1, 2014, and 20 per cent after January 1, 2016 while preferential taxes will be reduced from 20 per cent to 17 per cent.

Deputies lined up for a more aggressive tax reduction roadmap that proposes applying a common rate of 20 per cent beginning July 1, 2014, saying it would boost domestic enterprises, make it easier for them to pay taxes and keep pace with the regional trend.

“The reduction from 25 per cent to 22 per cent is just a temporary and normal solution in the very difficult economic situation which needs urgent actions. Therefore, I think to lower the rate to 20 per cent is reasonable and a breakthrough for the economy,” said Nguyen Van Binh, an NA deputy from Haiphong.

Do Van Ve, an NA deputy from Thai Binh province, said that low tax rate would encourage enterprises to do business better to gain profit to pay tax.

According to Ve, now and in the next few years, enterprises are facing numerous difficulties. Meanwhile, Vietnamese enterprises have to compete with foreign-invested enterprises and be overwhelmed in their home market.

“I would like to propose reducing tax rates to 20 per cent this year and to 18 per cent in the following years without discriminating between big and small enterprises. By doing so, we can ensure a level playing field,” Ve said.

Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry,  urged that the level of 20 per cent should be applied for all types of firms, including small and medium size enterprises.

“Statistics from the tax agencies show that around 30 per cent of companies are able to pay tax while the rest are making losses. However, this 30 per cent group is serving as a momentum to the national economy’s development,” Loc noted.

Nguyen Thi Nguyet Huong, an NA deputy from Hanoi, said the 20 per cent tax rate should be applied from July 1, 2013 to assist local enterprises, with 69 per cent of them reporting losses.

Many NA deputies also advocated the removal of the cap on corporate advertising spending, adding that this should need a roadmap.

The revised law is expected to be approved by the National Assembly during its June meeting before coming into force in July 1, 2013.