Tax break proposed for lowest bracket

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The Ministry of Finance has proposed a tax exemption for people with a monthly income of less than VND9 million (US$440).

The proposed exemption would only be temporary, lasting from August 1 to December 31.

This income group currently pays a 5 percent tax on their income after claiming a personal deduction of VND4 million per month.

The proposal also includes a capital gains tax exemption for stock investors from August through the end of 2011. According to the Ministry of Finance, such an exemption is necessary because many investors have incurred losses over the past two years due to market declines.

Analysts and taxpayers have been calling for amendments to the Personal Income Tax Law, which was approved in 2007. They say that higher tax thresholds and more deductions for dependents are necessary given continued inflation.

The finance ministry also plans to propose a 30 percent tax reduction for small- and medium-sized enterprises, this month.

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