The Ministry of Finance said Tuesday it plans to cut corporate income tax by 2 percentage points to 23 percent by 2014 after the government recently pledged to cut the tax as soon as next year.
News website VnExpress quoted the Ministry as saying that a bill for the purpose has been drafted and submitted for approval by the government and National Assembly.
According to the Ministry, the new tax rate will be low enough to compete with other countries in attracting foreign investment.
At 23 percent it will be the same as in Thailand and lower than in some other countries like China, Indonesia, Malaysia, and the Philippines.
But the government's total revenue, which was VND674.5 trillion (US$32.4 billion) last year, would fall by VND12 trillion ($576 million) when the new rate takes effect, the Ministry said.
Some sectors will see steep cuts in the tax. For small and medium-sized enterprises with no more than 200 workers and annual revenues of less than VND20 billion, it will fall to 20 percent.
Print newspapers and firms building social housing will pay a mere 10 percent.
Deputy Prime Minister Vu Van Ninh said December 3 the gorvernment will seek for the National Assembly's approval for a tax cut to under 25 percent by next year, and that the reduction is part of the government's overall tax reform scheme it plans to implement through 2020.
Vietnamese firms recently called for cutting the tax to 20 percent by 2013 so that they can survive the ongoing economic slump
The tax was reduced from 32 percent to 28 percent in 2004, and to 25 percent in 2009.
The ministry said corporate tax revenues have gradually increased since 2009.
They were worth VND52.19 trillion ($2.5 billion) in 2009 and increased to VND82.3 trillion and VND96.6 trillion in the next two years.
They are estimated at VND129.39 trillion this year.
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