return icon

Income tax cut will help big businesses only: expert

Professor, Doctor Pham The Anh talks on the proposal to reduce 30 per cent of income tax for all Vietnamese amid the pandemic.

Professor Pham The Anh. — Photo

Do you support the proposal to cut down 30 per cent of income tax for all Vietnamese enterprises by the Board for Private Economic Development Research?

Frankly speaking, I don’t support the proposal.

I remember that in the past I objected to the Government’s decision to grant preferential tax policies for enterprises’ income tax. Such policies do not help the enterprises much as they only benefit those that are not financially affected. I’m sorry to say, enterprises which are seriously hit by the current economic situation do not benefit from that decision.

The results of a survey conducted by the Board for Private Economic Development Research (or called IV Board), managed by the Government’s Advisory Council for Administrative Procedure Reform, has pinpointed that the hardest challenge Vietnamese enterprises face right now and in the coming months is that they have received only about 20 per cent of the usual number of orders from their clients.

Meanwhile, they still have to pay monthly wages, social insurance, medical insurance and trade union fees for their employees. These payments account for some 72 per cent of their sales revenue. Meanwhile, the enterprises still have to pay both the principal and interest rate of their debts from the bank, plus regular expenses to run their business.

All the enterprises have asked the Government to adopt policies to help them overcome this critical moment. In their opinion, the Government’s decision to give them a preferential income tax payment is not really necessary.

So in your opinion, what is the driving force for the IV Board to come up with such a proposal?

Most of the members of the IV Board are representatives for big enterprises in Vietnam. These firms are not on the list of enterprises that were granted preferential policies in the first drive. That’s why the proposal this time will bring about benefits to big enterprises, not the whole country’s economy.

All in all, for the interest of the enterprises community as well as for the national interest, the proposal is not really suitable.

What do you think about the policy to support enterprises by granting preferential income tax treatment?

The third survey conducted by the IV Board was done following the return of the COVID-19 pandemic. Due to the pandemic, up to 20 per cent of Vietnamese enterprises have stopped operations, 76 per cent of enterprises have failed to balance between their income and expenses, 2 per cent of the enterprises have declared bankruptcy and only 2 per cent of enterprises have stated that they have not been affected by the pandemic.

That’s why in my opinion, the preferential income tax policy will only bring about benefits to the 2 per cent of enterprises which have not been affected by the pandemic.

The decision to reduce income tax for enterprises across the board will drain the public financial resources while breeding an inegalitarian atmosphere among the business community while deteriorating the business environment.

Enterprises which are on the verge of going bankrupt will feel that they are badly treated by the Government. They will say the Government only pays attention to big enterprises.

We agree that this year the State budget will be in deficit. As a result, the Government will have to borrow money to compensate for the deficit. That’s why, in my opinion, the support from the Government should be considered an encouragement for enterprises only.

What do you think about the Government’s decision to lower the interest rate to support enterprises?

Many banks have redundant capital, yet they don’t lower their lending interest rates. This means that our monetary policy is not designed to support enterprises which are in special circumstances. So, I think, the difficulty that Vietnamese enterprises confront right now is not simply a shortage of investment capital, but the output/consumption market for their products.

On the other hand, for enterprises still maintaining their normal production in the COVID-19 pandemic, they will benefit from the low interest credit offered by the banks. If this is the case, why should the Government’s fiscal policy support these enterprises?

The Government should use this financial resource to support the people who lost their jobs and enterprises which are facing difficulties in maintaining their normal production, not simply to lower their enterprises’ income taxes.  VNS/TCTC

Decree aims to ensure companies benefit from corporate income tax cut

Decree aims to ensure companies benefit from corporate income tax cut

A decree has been published to guide the implementation of a National Assembly resolution offering firms a 30 per cut corporate income tax (CIT) cut.

Finance Ministry rejects tax reduction proposals

Finance Ministry rejects tax reduction proposals

The Ministry of Finance has rejected several proposals to reduce taxes to help revive production and trade and support businesses affected by Covid-19.


Amid global unrest, VN billionaires incur huge losses

Despite good news about the economy, including high growth rate and low inflation, stock prices have been sliding all over the globe.

Vietnam needs to expand airport network to relieve pressure on infrastructure

Vietnam ranks No.1 on the list of the 25 countries with the fastest post-pandemic recovery of the domestic aviation market.

Binh Duong lures foreign investors with special care

The southern province of Binh Duong has taken the lead for foreign direct investment (FDI) attraction thanks to its methods of taking care of investors.

Securities under pressure from external risks

Although the US Federal Reserve (FED) raised the interest rate in the hope of reducing inflationary pressure, it has come as a shock to see a rise in the core US inflation data, despite falling oil prices.

Unemployment rate falls, workers' incomes increase

According to the General Statistics Office's Report, the labor and employment situation in the third quarter of 2022 continued to recover.

The most expensive birds in Vietnam

Red-whiskered bulbs (Pycnonotus jocosus) with original colors are priced at VND500 million and tiny chickens with original colors sell for thousands of USD.

Drinks from dracontomelon: A popular heat-relieving drink in Hanoi

Sweet drinks made from ‘sau’, a fruit which is known scientifically as Dracontomelon, are a popular heat-relieving drink in Hanoi during the hot summer.

1,000 authors with doctoral degree or higher compiled textbooks for new academic year

As many as 1,574 authorities participated in compiling textbooks for six grades in accordance with the new general education program issued in 2018.

Expectations positive for growth trajectory

The Vietnamese economy has been gradually bouncing back thanks to the government’s major efforts to curb the pandemic and remove obstructions to progress for enterprises.

Law on Pharmacy needs to be amended

The lack of medicine at public hospitals has caused concern among the public. The Prime Minister has instructed the Ministry of Finance (MOF) and relevant ministries to find solutions to resolve the problem.

FIEs seek streamlined workforce policy

The human resources of Vietnam are improving to meet the demand of foreign-invested enterprises. However, they may require stronger policies on visas to enhance performance and transfer high technologies to Vietnam

US investors display confidence in Vietnam

Vietnam and the United States are seeking ways to increase their investment and trade ties, with the latter pledging to support the latter in education, training, and the energy transition.

Entrepreneurs blaze a trail in the city

Die-hard entrepreneurs are re-inventing themselves to solve business problems and find their niches in Ho Chi Minh City.

VN ranks 48th in Global Innovation Index 2022

Vietnam ranked 48th among the 132 economies featured in the Global Innovation Index 2022 (GII 2022).

Outstanding policies take effect in October 2022

A string of new policies on higher vehicle registration fee, termination of compulsory unemployment insurance premium, electronic identification and authentication and cybersecurity come into effect in October 2022.