At the discussion session of “Draft Resolutions about tax solutions in order to solve difficulties for businesses and individuals in 2012” this morning (June 12th), most representatives agreed the solution package following the suggestion of Government, but thinking that this should be implemented ealier and needed to expand the support scale more in comparisom with the statement sending to Parliament.
Representative Nguyen Ba Thuyen thought straight that Government showed the solution package of VND 29,000 billion too late. “But better late than never. The economy is like bodies of human, if having a sneeze or a running nose then we just need to have a tablet, but if letting it become serious ill then it’s hard to regain though having ginsengs”, representative of Lam Dong province compared.
Agreeing with this comment, representative Nguyen Thanh Hai (Hoa Binh) thought that the solution package generally just had the significance of encouragement spirit, but there was still not much the real effect. The support package about taxes mainly was just the support for the output of businesses. It just formed and presented when businesses had business operation and profit. The matter of reducing 30% business income tax really had the effect on having-profit businesses but not on the majority which were having to fight with too-high input costs.
According to representative Hai, the number of businesses enjoying this solution package of Government just made up about 30%, while nearly 40% other businesses having development potential and good contribution but facing with difficulties momently because of objective conditions were not supported.
Therefore, he suggested to reduce VAT and manage tightly prices with businesses supplying basic goods as input raw materials of production such as electricity, coal, oil and gas, cement, iron and steel; exempting, reducing or extending tax paying for businesses having lots of inventory. “How businesses enjoy reducing, extending, postponing taxes when increasing input costs, instead of only enjoying when businesses having turnover and profit as the present support package” pressed the representative.
The solution package of Government still can’t affect to the majority who are having to fight with too-high input costs.
Representatives were also worried that the rate of extending, reducing 30% of tax for small and medium businesses like the suggestion of Government were not enough “dose” and needed to reduce more to bring into play the effect when more than 50% businesses working with no profit and loss. According to the calculation of Government, the matter of reducing business income tax from 25% down to 20% could make the budget decrease VND 25,000 billion. Representative Mai Huu Tin (Binh Duong) thought that although reducing taxes much stronger, it still could make the budget increase. “We also understand that we should not create risks for the budget but if businesses die then it will be a bigger risk for the economy. Moreover, reducing taxes creates motivation for businesses to operate more effectively, from then it will increase the source of income for the budget”, analysed the representative.
The solutions that Government reported, according to estimation, made decrease the budget of this year about VND 9,000 billion for 450,000 businesses which were operating, just equalling about VND 20 million for each business. “I believe our budget can support businesses better than that”, admitted Mr Tin.
Also about the matter of reducing 30% business income tax for small and medium businesses, representative Mai Huu Tin (Binh Duong) suggested to consider again the way to classify businesses. Two criterions to classify nowadays were the size of total fortune and the average number of employees every year, between them the capital was the prior criterion. The unresonableness was that instead of taking the registered capital or owned capital to make foundation, they use the total fortune including borrowed capital, capital mobilising from other sources (the ever-changing elements following operation in each period) to make foundation. Therefore with a company having its own capital of VND 30 billion but if the total fortune exceeding VND 100 billion then it would not have chances to enjoy reducing taxes.
The rate of business income tax of 25% nowadays though Government thought that it was not high but according to representative Huu Tin, businesses were having to pay costs higher than some other countries and had to accept many unofficial rates of taxes so when reducing business income tax down to 20%, it was still higher the real amount of tax that businesses had to pay. “There are some costs in Vietnam that are not admitted such as rewards for members, inviting experts, good managers to be members of independent Board of Directors, etc. These were reasonable costs but we didn’t accept. Therefore really-paying business income tax was higher than the title number of 25%”, said Mr Tin.
Representative Nguyen Thanh Hai thought that the solution package only had the significance of encouragement spirit.
The rate of costs for advertisement was controlled in order not to exceed 10% total costs. Any businesses which spent more than this rate will be disallowed expenditures. To compete they still had to spend more than the rate 10% and accepted to be disallowed expenditures. The real profit therefore was lower than the profit when drawing the balancesheet with tax office. Therefore businesses were having to pay the amount of taxes higher than 25%.
Ealier, the Committee of Budget Finance expressed their disagreement about reducing fixed tax, business income tax for individual households trading boarding-houses, students, baby keepers. However, representative for the voice of electorate of Ho Chi Minh city Ms Truong Thi Anh suggested Parliament to agree with the suggestion of Government.
“Ho Chi Minh city has more than 1 million of workers, students coming to live and study. Accommodation is the most legitimate needs of theirs, especially poor workers. Through the reality of Ho Chi Minh city, this group of subjects has good effect to generate society. Ho Chi Minh city has organized to survey, to campaign business subjects to commit not to raise prices, etc. Through wrap-up and estimated one year, this has created the pervasion and high agreement of people”, the representative explained. Therefore, Ms Anh suggested to implement the policies like the year 2011 to ensure macroscopic and social security.
Stating about the opinions of the Committee of Budget Finance, Chairman Phung Quoc Hien expressed that the majority of opinions agreed reducing business income tax and the solutions of Government. However, according to Mr Hien, most opinions didn’t agree exempting fixed tax, business income tax like in the suggestion because the rate of reducing was small, unnoticeable, the scale of reducing taxes was narrow, unfair among different fields. Some opinions suggested to exempt personal income tax and VAT at the first grade like the eighth resolution of Parliament and reducing VAT to stimulate the consumption.
Thanh Lan – Song Linh
(According to VnExpress.net)