Tax reforms to accompany economic restructuring (15/6)
15/06/2012 - 22 Lượt xem
According
to Report 77/BC-CP dated April 17, 2012, referring to an overall plan
for economic restructuring, sent by the Government to the National
Assembly Standing Committee, economic restructuring will encompass the
restructuring of credit institutions (with commercial banks to be at
the core of restructuring); the securities market and financial
institutions; state-owned businesses; investments; and economic sectors
and economic regions. The restructuring and the 13 solutions stated in
the Government's plan are expected to result in appearance of a number
of new economic activities that require new tax solutions.
These
six new measures include firstly, an early change in the rate of tax
and fees per gross domestic product (GDP) in accordance with the tax
system reform strategy for the 2011-2020 period and the tax system
reform plan for the 2011-2015 period, in order to pave the way for
businesses and individuals to increase savings and investment capital.
Under the plan, a law amending and supplementing some provisions of the
enterprise income tax law will be submitted to the National Assembly
for approval in 2013 and is expected to take effect in 2014. The
enterprise income tax rate is therefore expected to decrease from 25 to
22-23 percent, while legal expenses related to tax calculations will be
made explicit and preferential tax policies for intensive investment
projects and projects renovating technology and restructuring
investment for higher added value would be changed. Strict regulations
will be issued to prevent organizations and individuals from taking the
advantage of legal loopholes to make profits. Preferential tax policies
for newly founded projects in regions where investment is especially
encouraged will be reviewed and improved. The enterprise income tax law
would be revised to restructure the tariffs and decrease the highest
tax rates. Decreases in enterprise income tax will not only encourage
skilled workers but also pave the way for businesses to decrease their
labor costs.
Secondly,
to renovate the structure and management of state-owned enterprises and
improve the efficiency of state businesses, firstly state groups and
corporations, to increase competitiveness of individual businesses and
the state economic sector in general and assure that state enterprises
play a positive role in the economy. While this group of solutions is
applied, state capital will be withdrawn from equitized companies
operating in fields in which the State does not need to have holdings.
Capital withdrawals, shares and other asset transfers in groups and
corporations operating in non-core areas, mergers and acquisitions and
bankruptcy are likely to occur when state groups and corporations
restructure their operations and resources for improved administration.
Concrete value added tax and enterprise income tax regulations and
invoice and other documentation procedures for each of the
above-mentioned cases need to be formulated and issued, and strict
control need to be put in place to avoid losses to state capital and
assets.
Thirdly,
to restructure credit institutions with commercial banks being at the
core of the restructuring process; restructuring will not only affect
the banks but also business customers as well. Mergers and acquisitions
and debt restructuring are expected to happen so regulations governing
these activities including guidelines for handling debts and reserves
in credit institutions need to be constructed to assure safety of the
financial and banking system and the economy as a whole.
Fourthly,
to restructure the securities market and related financial
institutions; this will require construction of new tax policies that
encourage organization and professional investors. It is necessary to
issue guiding documents on tax obligations related to operations in the
securities market to increase the market transparency and encourage
individual investors to enter the market through professional
investors, such as via investment funds. The personal income tax law
should be supplemented with a provision that allows individuals to
count their contribution to a voluntary pension fund into their taxable
income to encourage establishment of such a fund. In cases where a
business contributes to a voluntary pension fund, the relevant
authority should allow that business to count that pay as a legal
expense, but concrete regulations on time and conditions to contribute
to the fund need to be issued to assure complete transparency about the
contributions.
Fifthly,
to suggest changes and improvements in preferential tax policies based
on lists of industries and products whose development is encouraged,
regional plans and lists of struggling localities where investment is
encouraged to restructure and increase investment in regions and
industries where investment restructuring is to take place; to change
tax rates; review investment promotion policies towards encouraging new
and intensive investment, increasing hi-tech products and industries
and added value. Preferences should not only be provided to new
businesses.
Sixthly,
in the short term, while the economy continues to face a host of
difficulties the economic restructuring plan needs to be realized in
combination with production, trade and market promotion solutions that
the Government is guiding in accordance with its Resolution
13/2012/NQ-CP dated May 10, 2012. It is necessary to have concrete and
timely guidelines on macroeconomic management, fiscal and monetary
policy solutions and tax exemptions and reductions so tax policies can
be executed systematically and effectively./.
Source: VEN
Source: VEN
