Vietnam’s Ministry of Finance is looking to amend multiple tax laws in the country, including a proposal to raise the current value-added tax (VAT) rate from ten to 12 percent.
The announcement came at a press conference on Tuesday, where the ministry said it would amend five laws that govern personal income tax, VAT, corporate income tax, special consumption tax and natural resources tax.
The new VAT law would see a reduction in the number of services and goods exempt from the tax, as well as the list of those that currently enjoy a favorable VAT of only five percent.
Current laws impose a VAT of zero percent on all exported goods, and a five-percent VAT on a number of goods essential for agriculture, medicine, education, science and technology.
For other goods and services, the VAT is set at ten percent.
According to the finance ministry’s announcement on Tuesday, the amended VAT law would impose a six-percent VAT on services and goods currently enjoying a VAT of five percent, and raise the across-the-board ten-percent VAT to 12 percent.
A number of VAT-free goods such as fertilizers, agricultural equipments and off-shore fishing vessels would also begin to be taxed under the new law, the ministry added.
The Ministry of Finance also proposed a doubling of the current special consumption tax (SCT) rates on pickup trucks.
Specifically, pickup trucks with a cylinder capacity of up to 2,500cm3 will be subject to a 15-percent SCT.
For pickup trucks with cylinder capacities of up to 3,000cm3, the proposed new SCT is 20 percent, and 30 percent for anything above that.
Twenty-cigarette packs will be subject to a 75 percent SCT starting from 2019, and from 2020, all cigarette packs will be levied an extra VND1,000 (US$0.04) in SCT.
Also beginning in 2019, the ministry is looking to impose an SCT of 10 percent on soft drinks, an item currently exempt from the tax.
Revisions to corporate income tax laws will offer a favorable tax rate of 15 percent for any small to medium enterprise (SMEs) with a yearly revenue of less than VND3 billion ($132,200).
For SMEs with a yearly revenue of between VND3-50 billion ($132,200-$2.2 million), the proposed tax rate is 17 percent, less than the current corporate income tax rate for SMEs of 20 percent.
The Ministry of Finance also plans to revise current personal income tax calculations, allowing those with a taxable monthly income of up to VND10 million ($440) to enjoy five-percent tax rate.
Currently, only the first VND5 million ($220) in taxable income falls under the five-percent category, while the next VND5 million ($220) is subject to an income tax rate of ten-percent.
Source: Tuoi Tre News
Photo: CBR Investment AG