Tax incentives following FTA commitment won't affect budget

Tax incentives following commitments to Việt Nam's free trade agreements (FTAs) would not significantly impact budget revenues, as the liberation of trade is to be gradual, according to representatives from the Ministry of Finance. — VNS Photo

HA NOI (Biz Hub) — Tax incentives following commitments to Viet Nam's free trade agreements (FTAs) would not significantly impact budget revenues, as the liberation of trade is to be gradual, according to representatives from the Ministry of Finance.

Pham Tuan Anh, Deputy Director of the Ministry's Department of International Cooperation, said at yesterday's conference that, to date, Viet Nam has signed FTAs, and the process of reducing the proportion of import-export taxes in budget revenues actually began with the country's participation in the World Trade Organisation.

Further, there were roadmaps for tax liberalisation following commitments to FTAs, thus, the reduction in import-export tax revenues would not be sudden, Tuan Anh said.

Tuan Anh noted that tax liberalization would improve the economy's competitiveness and boost business and production, which would make up for the reduction in import-tax revenues.

According to Dao Thi Thu Huong, Deputy Director of the General Department of Customs' Import-Export Tax Department, import-export taxes currently accounted for 8 per cent of budget revenues. While in the 2016-20 period, the proportion was expected to fall to 6-7 per cent.

In 2016, revenues from import-export taxes were estimated to total VND270 trillion (US$12.05 billion).

The Law on Import-Export Taxes No 107/13-16/QH13 came into force on September 1.

No tax exemptions for imported cars by overseas Vietnamese

Huong said at the conference that overseas Vietnamese who return home would no longer enjoy tax exemptions when importing cars or motorbikes under the regime of movable property, as of the beginning of September.

Previously, tax exemptions were provided to overseas Vietnamese to encourage their repatriation, which created a loophole, Huong said.

Huong added that only one in ten automobiles and motorbikes imported under the regime of movable property of overseas Vietnamese were found to be of the right subject for tax exemptions. — VNS