VietNamNet Bridge – National Assembly Standing Committee members yesterday, July 13, supported a Government proposal to grant a tax holiday or reduction to some categories of taxpayers in hopes of encouraging enterprises to boost production and help individuals struggling against high inflation and tough economic times to stabilise their lives.

Minister of Finance Vu Van Ninh presented a number of proposed measures to the committee yesterday which, if adopted, would assist enterprises – particularly small- and medium-sized enterprises that employ large numbers of workers – and individuals to more effectively contribute to national socio-economic development.

Ninh asked the National Assembly to reduce the corporate income tax by 30 per cent for enterprises already entitled to extend their tax payments in 2011 until next year in accordance to Government Decision No 21/2011/QD-CP.

The Government also proposes a 50-per-cent reduction in value-added tax (VAT), personal and corporate income tax in the third- and fourth-quarter of 2011 applicable to individuals or households letting rooms to workers and students, to households or individuals working in child care, and to food caterers for workers. However, in order to enjoy tax relief, they would have to commit to maintain charges levied on tenants or workers at 2010 levels.

Ninh also asked the Committee to exempt dividend income derived from securities from taxation between August 1, 2011, and December 31, 2011 – except for shares in joint-stock banks, financial investment funds or other credit institutions.

To help stabilise the securities market, the Government also urged the committee to exempt personal income tax from all capital gains arising from share transfers.

The proposal would also call for an income tax holiday in the latter half of the year for workers with a monthly salary of VND4-9 million; for individuals with one dependent and a monthly salary of VND5.6-10.6 million; and for individuals with two or more dependents and a monthly salary of VND7.2 – 12.2 million.

If the Government's proposal were approved, it would cost the State coffers about VND13.3 trillion ($649 million) in 2011, Ninh said.

National Assembly Economics Committee chairman Ha Van Hien characterised the Government's proposal as positive psychological therapy for markets and enterprises.

Council of Nationalities chairman K'sor Phuoc, Committee of Social Affairs chairwoman Truong Thi Mai and National Assembly Ombudsman Tran The Vuong also voiced support for the Government proposal, but they asked for a strict monitoring system to ensure the policy were well implemented.

The proposal will go to the first meeting of the 13th National Assembly, where it is scheduled for debate on July 21.

Environmental tax

Later yesterday, National Assembly Standing Committee members discussed the draft Resolution on Environmental Tariffs.

The tariffs would be levied on petroleum, diesel, coal, HCFCs, plastic bags, herbicides, pesticide and other substances.

Once the Law on Environmental Protection is issued and takes effect, the current VND1,000 tariff levied on one litre of petrol would be transferred to the environmental tariff scheme.

Under the draft resolution, the tariff to be levied on one tonne of coal would be VND5-10,000 and the tariff for one kilogramme of plastic bags about VND40,000. A key objective of the resolution would be to encourage the public habit of using plastic bags.

The draft resolution is expected to be approved by the Standing Committee today.

VietNamNet/Viet Nam News