National Assembly delegates from Nghe An delegation proposed not to impose special consumption tax on gasoline.

On the morning of November 22, the National Assembly discussed in groups the Draft Law on Corporate Income Tax (amended) and the Draft Law on Special Consumption Tax (amended), after listening to the presentation and examination report at Dien Hong Hall.

The National Assembly delegation of Nghe An province discussed in Group 3, together with the delegations of Bac Giang and Quang Ngai. The discussion was attended by Comrade Do Van Chien - Politburo member, Secretary of the Party Central Committee, Chairman of the Central Committee of the Vietnam Fatherland Front, and a delegate of Nghe An delegation.

Calculating a suitable roadmap for increasing tobacco taxes

Regarding the Draft Law on Special Consumption Tax (amended), the National Assembly Delegate of Nghe An has 2 opinions on the taxable subjects and tax rates for cigarettes. Mr. Tran Nhat Minh, full-time National Assembly Delegate of Nghe An, proposed to consider not imposing special consumption tax on air conditioners with a capacity of 90,000 BTU or less and gasoline.

According to him, with the development of the economy and society, gasoline and air conditioners have become essential needs in daily life, no longer luxury goods. In addition, gasoline is subject to two taxes at the same time that limit consumption: special consumption tax and environmental protection tax.

Delegate Thai Thi An Chung - Member of the Provincial Party Executive Committee, Deputy Head of the National Assembly Delegation of Nghe An province, also agreed that air conditioners with a capacity of 90,000 BTU or less should not be subject to special consumption tax.

The Ministry of Finance’s explanatory report said that some countries, including European countries, impose special consumption tax on air conditioners. However, according to Ms. Thai Thi An Chung, that comparison is a bit lame because Europe has a temperate climate while Vietnam has a tropical climate, such as in Nghe An in the summer, 38, 39 degrees Celsius is “hot as hell”.

According to the delegate of Nghe An, it is necessary to study the separation by capacity or technological criteria to protect the environment as a basis for considering special consumption tax on air conditioners.

For example, only tax air conditioners that do not use Inverter technology (inverter technology helps control the rotation speed of the compressor to match the cooling capacity, thereby saving 30-50% of electricity consumption); or have a capacity higher than 90,000 BTU...

Delegate Thai Thi An Chung also proposed to add the subjects of special consumption tax to luxury products such as expensive watches and expensive handbags; at the same time, she agreed with the review of the National Assembly's Finance and Budget Committee that the Government should not be authorized to decide on subjects subject to special consumption tax or not, because according to the Constitution and laws, this content is under the authority of the National Assembly.

In addition, also related to this Law project, delegates: Tran Nhat Minh and Thai Thi An Chung also expressed their agreement on the necessity of adding tax rates on tobacco products to implement the National Strategy on Tobacco Harm Prevention to 2030 and increasing taxes on alcoholic and sugary beverages.

However, delegates all said that it is necessary to calculate a suitable tax increase roadmap, ensuring the overall situation; avoiding "shocking" increases as soon as the law comes into effect, affecting the industries that currently hold quite an important position in budget revenue and impacting the supply chain of these industries.

In addition, delegate Thai Thi An Chung also proposed amending the definition of tobacco products to cover e-cigarettes and heated tobacco products that are also subject to special consumption tax, ensuring compatibility with the direction of amending the Law on Prevention and Control of Tobacco Harms in the coming time.

Ensuring consistency of legal documents on tax incentives

Speaking at the discussion, Ms. Nguyen Van Chi - Deputy Head of the National Assembly's Finance and Budget Committee, delegate of Nghe An delegation, took the time to make overall comments, as well as raise a number of issues that are still inadequate for the draft Law on Corporate Income Tax (amended) such as: Tax collection on e-commerce, regulations on tax rates for small and micro enterprises; compatibility, solutions to apply tax incentives when applying the global minimum tax...

In particular, according to delegate Nguyen Van Chi, the “soul” of the Law on Corporate Income Tax is the tax incentive policies. However, the Government’s report said that, up to now, the preferential sectors in the Law on Corporate Income Tax do not overlap 100%, but are also narrower in scope than the sectors currently recorded in legal documents on investment.

Therefore, according to the delegate of Nghe An, the amendment of the Law on Corporate Income Tax, in principle, must look at the consistency of legal documents. However, according to her, the draft Law is basically kept as it is and some areas from specialized laws issued later are added, but not all.

Delegates agreed that when the draft Law sets out the principle, if there are different issues related to tax incentives, the Law on Corporate Income Tax will apply.

However, the problem arises here that the Law on Promulgation of Legal Documents stipulates: If the same issue is promulgated by the National Assembly, the subsequent document is valid; leading to the case where specialized laws promulgated after the amendment of the Law on Corporate Income Tax have provisions on tax incentives, how will they be applied when the amended Law on Corporate Income Tax has the principles mentioned above?

In addition, the delegate of Nghe An delegation also had concerns about the regulations on special investment incentives when the draft Law only stipulates the conditions based mainly on the total investment capital of 30,000 billion VND, but only stipulates the minimum disbursement of 10,000 billion VND in the first 3 years. If so, when conducting post-audit, the tax authority has no basis to check whether the enterprise meets the incentive conditions because it is unclear when the 20,000 billion VND will be disbursed?