Research on reducing corporate income tax to 20%

That is the proposal of National Assembly Chairman Nguyen Sinh Hung on the drafting of the Law amending and supplementing a number of articles of the Law on Corporate Income Tax at the meeting of the National Assembly Standing Committee on the afternoon of March 18.

Reasonable tax policy creates revenue for the budget and creates conditions for business development.

The meeting gave opinions on the Government's proposal to amend and supplement a number of articles of the Law on Corporate Income Tax.

Deputy Minister of Finance Nguyen Thi Mai said that the Draft Law stipulates that the general tax rate will be reduced from 25% under the current Law to 23% and a tax rate of 20% will be applied to small and medium-sized enterprises.

If this tax rate is approved, from 2014, the expected state budget revenue from corporate income tax will be about 137,000 billion VND, a decrease of 14,064 billion VND.

The reduction of corporate income tax rate has received the majority of opinions in agreement. However, National Assembly Chairman Nguyen Sinh Hung suggested that the Government consider reducing it to 20%. According to the National Assembly Chairman, reducing income tax to 20% will help businesses accumulate capital, continue to use it to reinvest in production, consolidate and increase the State's revenue.

Deputy Minister Nguyen Thi Mai said that, implementing the tax strategy until 2020, the Government proposed a common tax rate of 23% based on calculations but the impact of reducing budget revenue. If corporate income tax is reduced more, along with the reduction of personal income tax (from July 1, 2013), budget revenue will be more difficult.

Regarding the Government's proposal to reduce the tax rate for small and medium-sized enterprises to 20% because these enterprises account for 87% of the total number of enterprises and are vulnerable to economic fluctuations and need more encouragement to develop, Deputy Minister Nguyen Thi Mai said.

National Assembly Chairman Nguyen Sinh Hung proposed that the Government and the Ministry of Finance continue to study reducing the general tax rate to 20% and implement it from 2014.

Mr. Phung Quoc Hien, Chairman of the National Assembly's Finance and Budget Committee, said that if the Government needs to calculate the level of compensation for budget revenue from other sources, it should immediately implement a 20% tax rate regardless of business type from 2014. If the revenue reduction is too large, it is necessary to outline a specific roadmap for tax rate reduction so that businesses can plan their business.

Regarding tax incentives, the Draft Law supplements preferential policies for microfinance institutions; tax incentives for farming, processing of agricultural, forestry and aquatic products, salt making, production of plant varieties and animal breeds; tax incentives for investment in expanding production and business...

Examining this content, the majority of opinions agree with expanding the scope of tax incentives to ensure compliance with preferential policies stipulated in specialized laws.

However, there are opinions suggesting that the Government review the issued investment incentive policies, research and supplement incentive policies for industries and professions in the agricultural and rural areas, focusing on the fields of farming, processing of agricultural, forestry and aquatic products, agricultural cooperatives, green, clean and environmentally friendly technology, and supporting technology of a number of key industries and professions with a preferential tax rate of 10% for a period of 10 years.

National Assembly Chairman Nguyen Sinh Hung said that some industries should be exempted from corporate income tax instead of applying preferential tax rates (10%). For example, businesses serving offshore fishing should be exempted from tax, or science and technology enterprises serving farmers in particularly difficult rural areas...

The draft Law will be submitted to the National Assembly for discussion at the upcoming 6th Session.

According to (Chinhphu.vn) - LT