NA deputies call for tax holidays

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SaigonTimes English - 24 month(s) ago 1 readings

NA deputies call for tax holidays

HANOI – The National Assembly (NA) Financial and Budgetary Committee and NA deputies shared the view that personal income tax exemptions and value-added tax reductions are a must to rescue businesses and restore the market.

NA deputies call for tax holidays

By Ngoc Lan - The Saigon Times Daily

Minister of Finance Vuong Dinh Hue presents a Government proposal on tax breaks for businesses and individuals at the National Assembly session on Tuesday - Photo: TTXVN
HANOI – The National Assembly (NA) Financial and Budgetary Committee and NA deputies shared the view that personal income tax exemptions and value-added tax reductions are a must to rescue businesses and restore the market.

“Due to the impact of prices, (people’s) lives are full of difficulties, whereas personal income tax cuts are modest. Therefore, I agree with the NA Financial and Budgetary Committee on personal income tax exemptions for individuals with earnings subject to the first tax threshold,” said Truong Thi Anh, a deputy of HCMC.

She was speaking at group discussions on Tuesday, when the Government put forward the solutions to remove the difficulties in production and business and stimulate the market in 2012. The deputy also proposed a 50% value-added tax cut for essential goods and services like food, foodstuff, sugar and medicine.

Anh’s proposal was also the voice of most NA deputies, and the NA financial committee suggested it should be included in the review report on the Government’s solutions. The committee and many deputies shared the view on personal income tax and value-added tax holidays to assist workers and stimulate consumption.

Moreover, NA deputies proposed reducing the corporate income tax rate from 25% to 20%.

Deputy Mai Huu Tin of Binh Duong Province said corporate come tax cut would not pose risks to the State budget, but instead would support the economy and businesses in tough times.

“The Minister of Finance last week said with a value-added tax reduction of 50%, the State budget revenue this year would drop by VND15 trillion. Meanwhile, if corporate income tax was slashed from 25% to 20%, the State budget would lose VND20 trillion,” Tin noted.

“But if the majority of small and medium enterprises go bust, the health of the economy will be severely affected, especially with the rising number of jobless people,” stated Tin.

He stressed corporate income tax reduction would create a motivation for businesses to operate more efficiently, and thus make greater contributions to the State budget.

The NA financial committee and deputies agreed on a 30% corporate income tax cut in 2012. Still, there was a suggestion that the list of entities to enjoy tax reduction should be expanded, instead of only small and medium businesses and labor-intensive firms as proposed by the Government.

In addition, deputy Tin of Binh Duong and Nguyen Thi Nguyet Huong of Hanoi, among others, asked the Government to review the criteria for identifying small and medium enterprises, which include the total assets and the annual average number of employees under Decree 56/2009/CP.

Tin stated chartered capital or equity capital is a better criterion to define the scale of a business than total assets. Under the current criteria, an enterprise with chartered capital of VND30 billion yet total assets exceeding VND100 billion is not classified as small and medium business, and thus cannot enjoy tax reduction.

Tin and Huong requested the Government to make the criteria more reasonable.

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