Tax waiver draft under heavy debate

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The draft resolution on removing late payment fines for certain tax payers has been submitted by the ministry (MoF) in hope of being passed at the October parliamentary assembly.

However, a representative from the National Assembly (NA) told VIR that the MoF’s proposal may still be lacking in persuasiveness.

The ministry said that the proposal aims to lessen burdens on businesses which are struggling to operate amid market difficulties.

“The market embraces challenges all the time, that is the rule. The argument is even more irrational taken into account the prospective macro-economic indicators this year,” said vice chairman of the NA’s Economic Committee Nguyen Duc Kien.

In 2014, a similar proposal by the MoF was rejected by the NA for the same reason.

Under the newly submitted draft, eligible beneficiaries include firms with violations resulting from unpaid state commissioned products or services, and whose partners have gone bankrupt or have unilaterally terminated contracts.

A total of VND9 trillion ($396 million) in fines are expected to be erased, providing that the owned fines incurred prior to July 1, 2013 and the original tax debt paid before December 31, 2015.

Kien pointed out that the sum was in fact significant to the state budget amidst the decreasing revenues from oil export this year. Besides, participating in free trade agreements requires import levies to decline across sectors, let alone the payable amount in the form of returned value added tax.

Moreover, “the number of beneficiaries is relatively small among the over 530,000 businesses in operation,” added Kien.

It is estimated that the lenient policy would benefit some 5,000-7,000 small and medium-sized enterprises.

The NA representative also noted that many concessions had been made pursuant to the Law on Tax Administration, including the extension of deadlines and removing debts as well as late payment fines. “In my opinion, there should not be another waiver because of the possibly unfair effect on the business environment,” Kien said.