Vietnam tax dept to propose changes to Value Added Tax
HANOI - Vietnam's General Department of Taxation will propose a series of changes to the country's value
added tax system in November, a tax department official told Dow Jones Newswires Tuesday.
The department will put forward the proposed amendments "and the National Assembly will discuss these changes in its
upcoming meeting," the official said.
Vietnam's National Assembly is the country's highest lawmaking body that meets twice every year. The next meeting is to
convene Nov. 14 and will last for around one month.
The VAT was introduced in January 1999 and operates on a tax rate between 5% to 20%, depending on the industry. VAT is
paid by the maker of each good that is passed up the "value chain" with the final consumer paying a 10% tax on the finished
product. As the good moves up the chain, the Ministry of Finance reimburses the previous taxpayer and the next seller adds the
tax. The end buyer pays the last tax, and that is the government's revenue.
However, the VAT has proved confusing since its introduction. Businesses complain that it's difficult to calculate their VAT
burden. They add that, although it in theory replaced other, now-defunct taxes, it is sometimes charged in addition to existing
taxes, raising some companies' tax burdens considerably.
The official wasn't able to say exactly what changes the tax department will propose, saying they have yet to be finalized.
According to a report in the Business Forum newspaper, three major areas will be put forward for amendment. The first will be
the introduction of new VAT exemptions, the second will be an adjustment of certain VAT rates, and the third will deal with
rebates.
Dow Jones - October 31, 2000.
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