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PIT exemption for the whole 2009 suggested
The Ministry of Finance said that it is compiling the plan on personal income tax exemption and reduction for five to six months in 2009. Meanwhile, experts believe that it would be better to exempt tax for the whole year of 2009.
Two projects have been suggested for tax exemption and reduction. Under the project 1, the tax exemption for five months will be applied to the different kinds of income. Meanwhile, the VND 100,000 tax reduction per month will be applied in the next seven months to the people who have income from salaries and wages and income from business activities.
Under the option 2, the tax exemption will be applied for six months to all kinds of income. In the next six months, tax exemption will be applied to the income from royalties, franchise, and income from heritages and securities gifts.
With the option 1, the state budget will see the tax collection down by VND 5.2 trillion, while with the option 2, the figure would be VND 6.7 trillion.
Minister of Finance Vu Van Ninh said that the tax exemption will be designed in the way that allows tax exemption to low income earners, while higher income earners will enjoy some tax reductions.
The plan on exempting and reducing personal income tax has been applauded by people and economists.
Dr. Nguyen Duc Thanh from the Hanoi National University said that this proves to be a reasonable policy, which is close to the people.
“If the State asks people to pay the tax for the first five months of the year after it allows them to delay the tax payment, this would badly affect the spending plan of many families in the last months of 2009. I think that it is a good move to exempt tax for the first five months of the year, and the suggestion is likely to be ratified by the National Assembly,” Thanh said.
Some people have said that it would be unfair to exempt the tax to all people, from those who have the income of several thousands dollars a month, and those who only have the income of several millions VND a month.
However, Thanh said that PIT exemption should be seen as the demand stimulus policy rather than the support to the tax payers. In Vietnam, the subjects that the Government needs to aim at in the demand stimulus program are those who are the subjects of the PIT tax.
Thanh suggested that it is necessary to reduce tax in ratios: those, who pay much in taxes, will enjoy a higher tax reduction, while those who pay less in tax will enjoy a lower tax reduction.
When asked if the State should stimulate the demand by giving commodity purchase vouchers to people directly, Thanh said that this will create good impacts, but this will require thorough preparation in technique.
Thanh, while admitting that the method will bring a faster and bigger efficiency than the tax exemption or reduction, said that the Government needs to set concrete time for application, and choose the Vietnamese commodities which have advantages in the domestic market. The most important thing is that the vouchers need to be given to the right subjects.
VietNamNet, VNE
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