Many of the National Assembly deputies are still in disagreement over the threshold for tax income, tax deductions and income tax for people working with private companies.
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Many of the National Assembly deputies are still in disagreement over the threshold for tax income, tax deductions and income tax for people working with private companies.
Personal income tax is the first of seven draft laws scheduled to be adopted at the second session of the 12th National Assembly. The issue captures the attention of not only NA deputies but also voters and people across the country.
According to the Secretariat, as many as 21 NA deputies gave their opinions on the draft law during the plenary session while 42 others expressed their views in the letter sent later on. This showed that the personal income tax draft law remains a hot topic of discussion, as many deputies have not yet agreed on a number of issues, including the threshold for tax income, tax deductions and income tax for people working with private companies.
However, it is necessary to bring the personal income tax law into effect. It can be said that personal income tax is, to some extent, a sensitive tax in comparison with other taxes, as it directly touches on people’s interests. Therefore, it requires wide and thorough discussion among the deputies, as well as careful preparation before applying the law.
Personal income tax is a direct tax, accordingly those who have low income will pay low tax, those who have high incomes will pay high tax and those who have income have to pay tax. Personal income tax in developed countries often accounts for between 30 percent and 50 percent of total tax collection. Meanwhile in
The personal income tax law was drafted in 2003 to replace the outdated ordinance on personal income tax for people with high incomes. However, the draft law is still in the pipeline, amidst fears from NA deputies about the feasibility of the law.
At the final discussions on the bill, before it is submitted to the NA for approval, many NA deputies still expressed their concerns about the decision, with the retional that a tax deduction at a rate of VND4 million/ month i.e VND1.6 million will be deducted from someone’s assessed monthly income if he/she has one dependent, is too low.
Some others said that if the regulation on the threshold for taxable income and tax deductions is still applied in the bill, the regulation will be out of date by the time the bill takes effect in the next two years.
In a recent interview granted to the media, NA Vice Chairman Nguyen Duc Kien said if assuming that tax deductions must be calculated beginning from VND7-8 million is the bill’s fundamental problem. According to him, tax deductions in the bill are reasonable and have been scrutinised base on the roadmap of salary reform, total GDP and estimates of people’s incomes from now until 2009.
At the November 2 session, Mr Kien reaffirmed that any individual having an income must be responsible for contributing one part of his/her income to the State.
Minister of Finance Vu Van Ninh shared the view that it is essential to clarify regulations on taxable earnings and the threshold of taxable income as taxpayers have the responsibility to make a social contribution.
After the November 4 session, the NA Standing Committee will ask the relevant agencies to gather opinions, then adjust it to ensure the fairness and efficiency of the bill.
The bill should be adopted as soon as possible. However, it is imperative to intensify propaganda activities so that people can have a thorough grasp of their rights and obligations to abide by the bill. In addition, the State should control people’s incomes and the tax sector should increase the quality and quantity of their personnel so they can address tax-related issues properly.
(Source: VOV)
