>> Finance Ministry seeks to raise personal income tax threshold
>> MOF considers tax reform in light of inflation
The Vietnamese National Assembly will not issue a new resolution on personal income tax (PIT) reductions and exemptions this year, said an official.
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| The application of PIT law must ensure the fundamental principle that paid workers are subject to taxation - Illustration photo |
Phung Quoc Hien, Chairman of the National Assembly’s (NA) Committee on Finance and Budget, revealed this information during a meeting with reporters outside of the NA\'s meeting on March 22.
In 2009, the NA issued a resolution on PIT reductions and exemptions; this year remains doubtful?
In light of the economic downturn in 2009, the NA issued a resolution on reductions and exemptions of PIT as well as some other taxes and fees in order to boost consumption and production.
However, this year has seen sharp increases in inflation, prompting the Government to implement policies that will reduce the cash supply and tighten consumption.
In my opinion, this year, the NA will not issue resolutions similar to those of 2009 because, from a national economic viewpoint, policies to stimulate consumption and investment should be applied during economic slowdowns, while a tightening of monetary policies are needed to curb inflation.
In Vietnam, PIT is currently is levied on around 330,000 people whose income is higher than the country’s average, while there are more than 51 million paid workers. We should have a proper policy on PIT otherwise we seem to be re-imposing taxes on high-income earners, which have been removed.
The application of PIT law must ensure the fundamental principle that paid workers are subject to taxation. However, social aspects should also be taken into consideration, particularly deductions for dependants and payment extensions for those in difficult circumstances.
Is the personal income tax threshold, VND4 million (USD191.3) per month, too low?
Any changes to PIT law should be carefully considered, as the current policy has only been place for a short time. We should not make hasty moves, quickly bowing pressure from the media or public opinion. This could have unintended effects.
Although people have complained that a general and widespread rise in prices has affected living conditions in the country, the fact remains that the incomes of most of people who face these difficulties fall below the tax threshold.
What are your opinions about the Ministry of Finance considering a revision of PIT law?
The ministry is just considering revisions of the PIT law, including the PIT for securities.
In my opinion, we should have stable policies, and not make changes based on temporary pressure.
Foreign experts complain about our unstable policies, including those that have changed due to media pressure.
