The Hanoi Times - Deputy Minister of Finance Do Hoang Anh Tuan on January 8, 2009 in the afternoon told the press he had received an instruction from the government to implement the Personal Income Tax (PIT) law as scheduled. However, the collection of the tax will not begin until May 2009.
Tuan told Phap luat TP HCM newspaper that the information about the tax payment extension would be officially released in one or two days.
Tax collection deferment to help stimulate demand
Tuan said that under the PIT Law, PIT payments will still be assessed every month, but will not be collected until May 2009.
It is thought that this will help stimulate demand, and help people have more money to overcome their current difficulties.
Tuan also said that in May 2009, at the National Assembly’s session, the government will seek permission from the National Assembly to extend or delay debt payment, reduce and exempt taxes for some subjects and on some types of taxable income.
PIT collection from singers will also be delayed as policy makers believe that the incomes of singers have been decreasing due to less shows.
However, Tuan said that the Ministry of Finance is going to seek the permission to keep collecting PIT on four types of income: 1/ real estate assignment, 2/ gambling 3/ presents and 4/ non-residential individuals who have incomes in
Tuan stressed that this is just the proposal of the Ministry of Finance and still needs approval from a higher level to be implemented. The four types of income just account for 20% of PIT, according to Tuan.
Measure that can bring more efficiency than salary increase
According to Dr Vu Dinh Anh, Deputy Head of the Ministry of Finance’s Market and Price Scientific Institute, the decision on deferring the PIT collection proves to come in line with the measures being implemented to stimulate demand. Most importantly, Anh said, the debt payment extension will reassure people, encouraging them to focus on production and business.
The tax payment extension will help markets become bustling again as the markets will attract more investors, who do not have to pay tax now.
Anh believes that the tax payment extension will be much more effective than the salary increase. He has also rejected the possibility of commodity prices skyrocketing with the decision.
