HCMC proposes excise tax on mobile phones
HCMC proposes excise tax on mobile phones
The HCMC People’s Committee has suggested the Ministry of Finance levy a special consumption tax on mobile phones and some other products and services that only high income earners can afford.
The city government said in its proposal that the value-added tax (VAT), the special consumption tax and the environmental protection tax, among others, are areas with potential for further tapping.
Products such as mobile phones, cameras, perfumes and cosmetics, as well as gaming business services and beauty services, should be subject to the special consumption tax.
According to the city government, perfumes and beauty services fall within the category of high-end goods and services. This helps widen the adjustment of income taxes among high earners.
The remaining products and services in the proposal, despite not being classified as luxuries, are not deemed essential. Therefore, the city government stated that it is necessary to levy excise taxes on them to boost production and consumption in a more reasonable manner.
The authority noted that mobile phones are an essential type of product for communication needs, but they should be subject to special consumption tax to regulate the incomes of high earners who have a strong demand for new-generation high-end products.
Statistics from the General Statistics Office revealed that Vietnam had imported US$3.6 billion worth of phones and phone parts during the year up to April, marking a 15.5% decline from a year earlier.
In other groups of taxes, Vietnam has 25 groups of goods and services exempt from VAT, while other countries typically have only four to eight groups of excluded items. According to the city government, too many items are now exempt from VAT.
Therefore, the city government has suggested the Ministry of Finance consider eliminating some of these items from the exemption list.
Meanwhile, environmental protection tax should be applied to batteries, accumulators and pesticides since their production and use pollutes the environment, explained the municipal government.
With regard to personal income tax, the city authority recommended partially slashing the tax and adjusting family allowances for the middle-income people to avoid creating too heavy a tax burden for this demographic.
