Revised tax policy to meet ASEAN and WTO standards
REVISED TAX POLICY TO MEET ASEAN AND WTO STANDARDS
Ha Noi, Feb. 10 (VNA) -- This year will see a massive revision of the tax system, stressing transparency, in line with GATT/WTO principles, said Deputy Finance Minister Truong Tri Trung.
The senior tax policy maker said the revision would target seven major policies, including value added tax (VAT), the enterprises' revenue taxes, high income taxes, and import-export tariffs.
A single tool for calculating the VAT rates - depreciation - will be the most important change in the to-be-revised VAT policy. In addition, the move will lengthen the list of VAT payers, including products and services in the list of special consumption taxes currently exempt from VAT, and cut short the number of VAT levels to three from the current four. Those enterprises which are not eligible to the above-said tool will pay a certain percentage of their revenues in taxes. The move aims to gradually eliminate the exemption or reduction of special consumption taxes which now protect some products and services.
A single tool for calculating revenue taxes will be applied to all enterprises, either domestic or foreign-invested. Difference in incentives in taxes levied on domestic and foreign-invested enterprises will be lifted in order to create a fair game for all players. Similarly, a single tool on high income taxes will be applied to both regular and irregular incomes.
This year will be marked with the reduction and cut of taxes on more than 700 products in implementing the Common Effective Preferential Tariffs (CEPT) Scheme and AFTA agreements. The move will also lift localisation incentives in import tariffs which are granted to motorbike assemblers and makers producing import substitutes. The Finance Ministry will also revise the list of tax categories in detail to meet the GATT/WTO (General Agreement on Trade and Tariffs reached by World Trade Organisation members) principles.
In regard to the fees and charges policy, the revision will reduce the levels and the categories of tax payments and lay a level ground in tax payment for domestic and foreign invested enterprises in an effort to reduce production and importation costs, and stimulate foreign investment.
Viet Nam begins a tax cut of import tariffs on more than 700 products this year as the first step towards an ASEAN Free Trade Area (AFTA). The country, therefore, has no other choice than to revise its current tax policy which mostly serves as a tool to protect domestic production.
"Tax management will be geared to further help organisations, individuals, enterprises and businesses to well implement their duties to the State budget. Auditing will be more frequently conducted and stricter punishments will be given to violators of tax policies," emphasized Deputy Finance Minister Trung.
