Leader of Ministry of Finance explains about the Bill amending 5 Tax laws

	An increase of VAT does not have a major impact on low-income people
	The Ministry of Finance explained the calculation of disbursement rate of the SBV
	Allowing securities companies to invest indirectly overseas

The Deputy Minister of Finance Vu Thi Mai stated at the monthly Government meeting. Photo: H.D

Ensure transparency of revenues and expenditures

According to Deputy Minister Vu Thi Mai, the Bill amending and supplementing a number of articles of Law on VAT, Law on Special consumption tax (SCT), Law on Corporate income tax (CIT), Law on Personal income tax (PIT) and Law on Severance tax (ST) to meet quick fluctuation of socioeconomic situation. In addition, the Bill aims to meet and comply with laws issued by the National Assembly such as Law on supporting small and medium-sized businesses, Law on Investment and etc.

In parallel with the implementation of the target of the restructuring of State revenues and public debt management to ensure safe and stable national finance, the Government directed the Ministry of Finance and relevant ministries to develop projects and organize and manage State expenditure closely, economically and against waste. At the same time speeding up the progress of disbursement of basic construction capital investment and enhancing the efficiency of using State budget to focus on well implementing Law on State budget 2015, Decrees of National Assembly on the plan of socio-economic development and etc.

Therefore, the Bill will contribute to reforming administrative procedures and removing difficulties for businesses. Specifically, for VAT, conditions for deduction of input VAT is providing non-cash payment documents for purchased goods and services except for goods and services partly purchased with a value from less than 20 million VND to less than 10 million VND.

Regarding to amendments to remove difficulties for businesses, the bill amending Law on Corporate income tax proposed to reduce Corporate income tax rate for micro businesses (businesses with a total annual revenue of less than 3 billion VND) to 15%; small and medium-size businesses (enterprises with less than 200 employees participating annual social insurance and a total annual revenue of from 3 billion VND to 50 billion VND) to 17%.

Impact is not great

The responding opinion of the press and public opinion, the leader of Ministry of Finance also gave specific explanations. For example, the increase in VAT rate will make the poor and low–income people suffer more burdens than the rich one.

According to the survey of people’s living standard for low-income people, the State has many supportive policies. Typically, health and education sectors are not taxable entities. Food sold by producers is not taxable, only foods traded are subject to taxable with a low tax rate. Besides, essential goods such as medicines and agricultural inputs are at a tax rate of 3% and expected to increase to 6%. The general tax rate is expected to increase from 10% to 12%.

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Hence, the Ministry of Finance assessed that the amendments to tax laws are expected to not make a great impact on poor and low-income people. Moreover, the State has provided policies to support for poor and low-income people and families under preferential treatment policy” Ms. Mai said.

Regarding opinion that the bill amending Tax laws will have an impact on inflation, Ms. Mai confirmed that the Ministry collaborated with the World Bank to study international experiences. It was shown that the impact on inflation is relatively minimal.

“The Ministry of Finance will continue to study and consult to complete contents of the Bill in line with the reality and international practices to submit competent authorities to review and decide”. Ms. Mai said.