Tax breaks wouldn’t help those in need

It isn’t the neediest businesses or individuals but profitable businesses and wealthy individuals that would most benefit from the government’s tax break proposal, said Nguyen Ngoc Bao, a member of the National Assembly’s Economic Committee.

He said the 30 percent corporate tax reduction for instance would mostly benefit businesses that make enough profits to pay taxes.

As for many other enterprises – around 40 percent – which are even struggling to maintain production because of capital shortage and high lending rates, this tax break wouldn’t help them in any way, because they don’t have any income to be taxed to begin with.

Similarly, the proposal for individual income tax exemption would only people with high incomes, Bao said.

“For those whose earnings are at the bottom of the tax ladder, the reduction would only be VND150,000 (US$7.5), which would be too insignificant,” he said.

Bao said in these difficult times of the economy, the government should find ways to help those enterprises that have been working effectively but have been hurt by the exorbitant lending rate of over 20 percent a year.

He suggested dividing businesses into three categories: ineffective enterprises, effective but needy ones, and profitable businesses.

“The government should focus on helping the second category,” Bao said. – Tuoitre

Tags: Vietnam banking industry, Vietnam finance, Vietnam financial, Vietnam Tax