Effective date for amended tax law still debated

Effective date for amended tax law still debated

The proposal to increase the personal income tax threshold has been approved, but the issue of when it should be applied remains unsettled, even when it was put on the table at a National Assembly meeting.

Under the government proposal, the personal tax threshold will be lifted to VND9 million a month, up from the current VND4 million. (VND1 million = US$48)

Taxpayers will also be allowed to deduct VND3.6 million for each dependent they have to take care of, while the current rate is VND1.6 million. Dependents are those who earn less than VND500,000 a month.

Varied opinions, however, have been recorded on the application date of the amended law, with some suggesting that the new personal income tax threshold be applied as of January 2013, while the opposing side says it should take effect seven months later.

“If the new threshold is applied on January 1, the state budget collection will be reduced by VND5.2 trillion,” said NA Deputy Chairwoman Nguyen Thi Kim Ngan, in concluding the discussion session on the amended personal income tax law on Thursday.

“The state budget will lose an additional VND5 trillion as the current tax exemptions and reductions have been extended to July 2013.

“Therefore, the NA should apply the higher threshold on July 1, 2013,” she concluded.

Delegate Le Cong Dinh, who represents Long An Province, concurred with the July suggestion, saying tax agencies need time to prepare for the new law.

Meanwhile, delegate Tran Du Lich from Ho Chi Minh City said taxpayers badly need the new tax law during these hard economic times.

“Applying the amended law on January 1 will affect the state budget, but the public needs to have their difficulties shared,” he said.

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