Lawmakers approve income tax breaks
A resolution adopted by the legislature to this effect allows for a 30% corporate income tax reduction for small and medium enterprises in a number of sectors in 2011. The same is applied to labor-intensive businesses in sectors such as agro-forestry-aquatic production and processing, textile, footwear and electronics.
Those renting homes to students and workers or providing daycare services will pay half the current value added tax and corporate or personal income tax rates from the third quarter to the year’s end.
As for personal income tax imposed on dividends, the NA decided on a 50% cut rather than an exemption proposed by the Government. The reduction takes effect from August 1 this year to end-December next year.
During the same period, individuals with monthly incomes below VND9 million will be exempt from personal income tax.
Phung Quoc Hien, chairman of the NA’s Financial and Budgetary Committee, described this resolution as more workable than what was suggested by the Government. The total tax breaks are about VND13.3 trillion, which is believed not to affect State budget revenue.
Some 413,000 enterprises paid taxes in 2010, up 214% from 2007. The Ministry of Finance has reported high growth in most tax revenues in the last five years, with 25% in the State corporate sector, 25% in foreign-invested enterprises, 33% in the local private sector, and 50% in individuals.
