Several lawmakers are unsatisfied with proposed tax cuts for the poor, which they say will not lift enough pressure off the backs of struggling working families.
Others are also standing up against proposed cuts for big companies.
The government is seeking legislative approval from the National Assembly to exempt those with monthly incomes of less than VND9 million (US$440) from taxes beginning August this year. The proposal would cut those taxes through December.
Phung Quoc Hien, chairman of the Finance and Budget Committee, said at a meeting Wednesday that many members of the National Assembly agreed that taxpayers need to be supported through tough economic times.
But he said the exemptions proposed by the government would not make a great impact.
The beneficiary group currently pays a 5 percent income tax after claiming a personal deduction of VND4 million per month and a VND1.6 million deduction for each dependent. As a result, their taxable income would be too low to translate into a tax exemption large enough to have a significant positive affect, according to Hien.
Minister of Finance Vu Van Ninh argued that the proposal aimed to encourage the workers who create most of the wealth in the society, even if the practical economic impact would be limited. But he also said the National Assembly should make its own decision on the matter.
The government is also seeking an approval to cut corporate income tax by 30 percent this year.
The National Assembly's Finance and Budget Committee said the tax cut should only be offered to small- and medium-sized enterprises, because many large companies were still turning large profits.
Nguyen Van Thuan, chairman of the Law Committee, said the proposed tax cut is not the right remedy for the real problem. "The biggest problem that local companies are facing now is access to credit as interest rates are now very high," he said. "This is an issue that has not been dealt with."
The National Assembly will vote on the proposal later this month.
The total value of tax cuts and exemptions in the proposal is estimated at VND4.2 trillion ($204.3 million).