VCCI proposes changes to tax policies
VCCI proposes changes to tax policies
The Vietnam Chamber of Commerce and Industry (VCCI) recently sent an official dispatch to the Ministry of Finance, suggesting changes to tax policies.
Regarding value-added tax (VAT) cuts that expire at year-end, the VCCI proposed extending the tax cuts on industries most hard-hit by the pandemic, notably tourism and airlines.
The extension is recommended to go beyond 2022 to help industries recover.
The VCCI also urged the ministry to revise tax policies on VAT-exempt products, including products in agriculture and fishery industries.
The chamber said current tax policies do not hold some products liable for VAT, so the manufacturers of those products are not entitled to input VAT deductions.
Meanwhile, the manufacturers still have to incur VAT on various input materials, including fuels and energy.
“Accordingly, such policies are putting these manufacturers at a disadvantage,” the chamber said.
VCCI also said that many imports were zero per cent taxed in their origin countries and not subject to VAT in Viet Nam either, so they had tax advantages over domestic products.
Consequently, the chamber was concerned that tax policies would encourage imports to the detriment of domestic production.
The VCCI also believe that these policies would cause disincentives to the division of labour and specialisation.
It could also be the case because manufacturers would buy fewer goods and services from outside to incur less non-deductible VAT.
“For these reasons, the VCCI recommend shortening the list of VAT-exempt products and holding them taxable,” the chamber said.
