Vietnam may stop imposing a fixed interest rates on back taxes. Photo: Ngoc Thang
The Ministry of Finance has requested the government to stop imposing a fixed interest rate on unpaid taxes from January 1, news website Saigon Times Online reported on Thursday.
The unpaid tax interest rate should vary from time to time and should be brought closer to the interest rates set by commercial banks, the ministry said.
When the unpaid interest is too high, many businesses will find it difficult to fulfill their tax obligations.
Since January 1 this year, the rate has been set at 0.05 percent a day, regardless of how long taxpayers have been behind their deadline.
That translates to an annual rate of 18.25 percent, above the common range of 9.5-10.5 percent at commercial banks, according to the ministry.
Previously, the rate was 0.05 percent for the first 90 days after the tax was due. After that period, interest would continue to accrue on a daily basis, but at 0.07 percent per day. That means unpaid tax interest could be as high as 25.5 percent a year.