VietNamNet Bridge - The Chair of the National Assembly’s Finance & Budget Committee, Phung Quoc Hien, recently denied that Vietnamese still have to pay the highest taxes in ASEAN.

Related news

Will taxes and fees be raised to pay for “integration costs”?

“This is wrong. It is unreasonable to say Vietnamese have to pay the highest taxes in ASEAN,” he told the local press on the sidelines of the ongoing National Assembly’s session.

The reporters raised the question about the taxes and fees Vietnamese have to pay annually to Hien to clarify the comment made recently by Tran Dinh Thien, head of the Vietnam Economics Institute.

Thien, at the 2015 Spring Economic Forum, said every Vietnamese has to bear the ratio of taxes & fees on GDP higher 1.4-3 times than other regional tax payers.

Hien said that only double taxation and fee imposition can be seen in some cases. He believes it is necessary to clarify what ‘fee’ and ‘charge’ mean.

Hien said most categories of tax have been cut recently, while the environmental protection tax on petroleum products is the only tax that has been raised.

“The environmental protection tax was raised to respond to export tariff cuts,” he explained.

Vietnam is one of a number of countries with low taxes for businesses. The corporate income tax, for example, has been cut from 32 percent to 25 percent, and will be cut by 2016 to 20 percent.

Some international institutions comment that Vietnam has been going too quickly on its path of reducing taxes. The sharp tax cuts will have an impact on the national economy, including a drop in state budget revenue from tax collections.

However, the government does not intend to impose higher taxes and fees in order to offset the state budget decrease.

Dr. Cao Sy Kiem, chair of the Vietnam Small and Medium Enterprises Association, said businesses have been discouraged by the tax and fee policies.

“They have complained about taxes and fees for a long time,” Kiem said.

Kiem noted that in some cases, the government raised tax rates on imports when the import prices fell, aiming to offset the state revenue decrease. This has pushed businesses’ production costs up. 

“Trying to collect more from taxes and fees to offset the state budget revenue decrease will badly affect production quality and management capability,” Kiem said.

Nguyen Thi Kha, a National Assembly’s Deputy from Tra Vinh province, said that tax policies need to be designed in a way to fit businesses’ conditions and incomes.

Dat Viet