MOF has proposed a 50 percent PIT reduction

Truong Gia Binh, president of FPT, the Vietnamese largest information technology group, said all technology firms are “contracting a chronic disease – lacking qualified workers”.

The Law on High Technology and other legal documents stipulate incentives to encourage investments in the hi-tech sector. 

In May 2016, the government released the Resolution 41 on the tax policy to foster the development and application of IT in Vietnam. However, the policy has not taken effect. 

Vietnam is seriously lacking qualified workers for the IT industry. Vietnam Works, an online recruitment firm, predicted that Vietnam would lack 500,000 workers, or 80 percent, of total IT workers it needs by 2020.

The MOF proposal on the 50 percent PIT reduction for workers in the hi-tech sector has been applauded by most businesses and experts.

Nguyen Minh Phong, a renowned economist, said that a reasonable tax policy should be created to attract more talent. With the tax reduction, workers’ income would be higher, while technology firms’ labor costs would not increase. 

Firms would receive indirect benefits from the policy as they have more high-quality products with unchanged production costs.

Nguyen Thi Cuc, chair of the Vietnam Tax Consultants’ Association, noted that the incentives applied to IT firms were less attractive than that applied in 2001-2008. 

This is because the CIT and PIT Law have taken effect, thus neutralizing the government-initiated solution packages on tax incentives previously launched.

Advocating a tax reduction for hi-tech workers, Cuc said this would help hi-tech firms develop rapidly and catch up with India and China. Countries with a developed IT industry have offered many tax incentives to the IT sector in recent years.

The Vietnam E-commerce Association (Vecom) has released a report showing that 31 percent of polled businesses have found it difficult to recruit workers in IT and e-commerce in 2017. The figure was higher than the 29 percent in 2016.

Workers with website administration and e-commerce trading floor management skills are the most wanted. Forty-six percent of businesses have problems when looking for workers with these skills.

The demand for qualified IT and e-commerce workers is increasing rapidly because doing business via social networks and e-commerce trading floors brings high efficiency. Vecom’s report says 32 percent of businesses did business via social networks in 2017 and 11 percent on trading floors.

RELATED NEWS

Scientist pioneers regenerative medicine research

Vietnam needs IT engineers to meet 4.0 industrial revolution

Mai Thanh