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Vote to relax income tax bite set for June 19
The National Assembly is thought certain to approve the Government’s personal income tax (PIT) exemption and reduction plan on June 19. The new scheme will go into effect on July 1.
The General Department of Taxation (GDT) has urgently notified local taxation agencies that people whose tax obligation was first postponed, and then waived for the first five months of 2009 that it will continue to be waived in June, postponing PIT imposition for a month longer than planned.
The GTD dispatch was sent after taxation agencies received a lot of questions from individuals and businesses about whether they have to pay PIT in June, while the National Assembly considered the Finance Ministry’s proposal to further exempt and reduce income taxes in the months ahead.
Under the Ministry’s plan, which is intended to apply further counter-recessionary stimulus to the economy, there will be two adjustments to the general income tax obligation.
• From July 1 until December 31, 2010, income from capital investments, capital assignment, including securities transfer, royalties and franchises will be exempted from tax.
• From July 1 through December 31, 2009, all PIT obligations will be reduced by 200,000 dong per month. In other words, individuals who would ordinarily be liable to pay up to 200,000 dong (that is, on incomes up to about 11,000,000 dong per month) will have a further tax holiday. Those individuals with larger incomes will be able to subtract 200,000 dong per month from their tax bill.
According to the Ministry of Finance, if the plan is approved, state budget collections in 2009 will be reduced by about 6.5 trillion dong, or about 45 percent of the original budget estimates for revenues from PIT.
Deputies are scheduled to vote on June 19.
Cao Sy Kiem, a member of the Advisory Council for Finance and Monetary Policies, told Tuoi Tre newspaper that the biggest difficulties resulting from the world economic crisis are over. Even so, he thinks that it is necessary to further exempt and reduce taxes in order to help production recover.
Kiem said “the tax exemption and reduction in the first five months of the year helped people, mostly business households, survive in the most difficult period. However, small business households still face a lot of difficulties due because consumers continue to restrain spending.” Therefore, he added, “we need to continue stimulating demand by cutting tax for the last six months of the year and 2010.”
Some National Assembly deputies say there is no need to waive PIT because PIT is only imposed on rich people. Do you agree?
To fight the economic downturn, we need to stimulate purchasing power by increasing the income of people.
Tax exemption will help high income earners have more money to spend. Farmers will be able to access preferential loans to purchase machines and equipment for production. Every economic sector can enjoy benefit from the demand stimulus packages, not only high income earners.
Do you think that the 6-month tax exemption is enough or should we continue waving tax until the end of 2010?
If we only waive tax for the first six months of the year, we will do things by halves.
vietnamnet, tt, vneconomy
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