A prominent issue for many Vietnamese businesses concerns the proposed narrowing of the 0 per cent VAT rate for export services.
Having encountered quite fierce protests from many organizations about the proposal to impose value added tax (VAT) on the transfer of land use rights, the Ministry of Finance (MoF) confirmed that it would not impose the tax.
Due to strong opposition against the proposal on raising value added tax (VAT), the Ministry of Finance (MoF) has recently proposed to delay the VAT increase to 11 per cent until from January 01, 2019 and to 12 per cent until January 01, 2020.
According to Dr Nguyen Duc Thanh, raising taxes is not a sustainable solution, as no society can thrive while shouldering a heavy taxation burden. It will slowly shrink.
Nguyen Manh Ha, vice chairman of the Vietnam National Real Estate Asociation (VnREA) said that the proposal of imposing VAT on land use rights of the Ministry of Finance will make the real estate market in danger.
‘We need to reconsider the assumption that the rich will suffer more than the poor as VAT increased. Because, in fact, more than 80% of the Vietnamese population is poor,’ said Pham Anh Tuan, Chairman of Board of Directors of the Cooperative Union of Agricultural Consumption (UCA).
“VAT rise will cause a burden on the poor.”
Higher VAT is expected not to affect poor and low-income people, the Deputy Minister of Finance confirmed.
The VAT increase proposed by the Ministry of Finance prompt me to the question: For whom? In a country where the State affirms that it is "of the people, by the people, for the people", raising VAT is eventually for whom?
According to Associate Professor, Dr Ngo Tri Long, former head of Price and Market Research Institute under the Ministry of Finance, reasons put forward by the Ministry to increase value added tax (VAT) are inappropriate and unconvincible.
The Ministry of Finance (MoF) has recently proposed to increase the value added tax (VAT) from 10% to 12%, effective from January 1st, 2019. It is estimated that more than half a million businesses and most of the people will be affected by the VAT increase.
