Business community pleas for cuts in corporation taxes

The current enterprise income tax rate of 25 per cent was considered too high in the context of increasingly high input costs and relatively difficult capital mobilisation, said members of the business community yesterday.

The rate should be cut to 20 per cent to help enterprises put funds in reserve, reinvest cash and boost business and production.

The ideas were raised by lawyer Dao Ngoc Chuyen at a workshop to review emerging issues related to enterprise income tax and value-added tax two years after two relevant laws came into effect. The workshop was held at the Viet Nam Chamber of Commerce and Industry in Ha Noi yesterday.

Chuyen also said that all regulations on deductible and non-deductible expenses should be concentrated in a single legal document rather than dispersed in several, as is currently the case.

Nguyen Thi Lan Huong, a law professor at Ha Noi National University said the preferential tax treatments as stipulated in the latest decree on enterprise income tax went to projects and enterprises in the investment field rather than to the capital scales and revenues of enterprises.

“Very few enterprises are actually benefiting from preferential tax treatments because a majority of enterprises are small and medium sized enterprises (SME) that are subject to a relatively high tax level if they strictly follow the rules,” she said.

Huong said that since SME’s hadn’t received significant preferential tax treatments, their tax burdens have partly lead them to file false tax claims in order to evade responsibilities.

She recommended that lawmakers may consider allowing SME’s to enjoy VAT exemption when their revenues reached a particular threshold or enjoy enterprise income tax exemption during a particular period.

“If one of these two measures is taken, it will act as an incentive to motivate enterprises to ensure proper accounting and invoicing systems in line with regulations so they will be eligible for tax exemption,” she said.

Representatives from the Ministry of Finance said that they would take into consideration the comments and hoped to be able to reflect these concerns in the revision of relevant laws. — VNS

Tags: Vietnam corporation taxes