Vietnamese firms, experts call for cutting corporate taxes

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Experts and firms in Vietnam are calling for an income tax cut to 20 percent for enterprises by next year to help them survive the ongoing economic slump.

Director of the Minh Dang Quang Law Company in Ho Chi Minh City, Tran Xoa, said with enterprises facing with financial difficulties, lower corporate taxes will help them expand next year and encourage foreign investment.

According to a recent report by the Vietnam Chamber of Commerce and Industry (VCCI), more than 40,000 enterprises had to shut down over the first nine months of this year, up 6.5 percent compared to the same period last year.

Tran Huu Huynh, head of the legal department of the VCCI, said if taxes are lowered to 20 percent from its current rate of 25 percent, around 500,000 enterprises of the country will have chances to increase their invesments and create job opportunitites for more people, local media reported October 25. 

Nguyen Minh Tuan, general director of the Nghia Pincer Company based in HCMC, said enterprises now hope that the government will have taxes reduced to 20 percent as soon as next year instead of waiting until 2020 as had been originally planned.

Tuan said the reduction will allow companies to save on costs, increase production and reduce prices, which will help to spur consumption, leading to an increase in the value added taxes for the state budget.

The government in 2004 reduced corporate income tax from 32 to 28 percent and then cut it to 25 percent in 2009.

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