|
Call for further extension of tax exemption
One of the government’s key financial advisers has called for the personal income tax exemption to be extended until at least the end of this year to boost the economy.
Doctor Cao Sy Kiem, a former central bank governor and a member of the national counseling board on monetary and financial solutions, said the tax exemption had not yet increased consumer spending.
The personal income tax exemption came into effect in January this year and on Friday the National Assembly is due to endorse an extension of the tax break to the end of June.
Although Vietnam had weathered the worst of the economic crisis this year, Kiem told Tuoi Tre the personal income tax exemption should be extended for at least a further six months.
Wage and salary earners will be reluctant to loosen their purse strings when they have to resume paying tax next month, he said.
So, the six-month tax exemption would only have been effective in alleviating people’s economic worries, he said. A longer exemption was needed to actually stimulate spending and boost production.
The Vietnamese government has forecast economic growth of 5 percent this year, as the global economic downturn impacts all areas of the economy. Last year, Vietnam posted growth of 6.2 percent.
The National Assembly has been told the six-month personal income tax exemption will cost the government VND6.8 trillion (US$382.7 million) this year, accounting for nearly 45 percent of the government’s forecast VND14.5 trillion ($816 million) budget deficit for 2009.
Kiem, who is also chairman of the Vietnam Small and Medium-sized Enterprise Association, also called on the government to consider easing the tax on land use and house transfers.
vietnews
|
