New Tax Laws Roundly Criticized

The new laws on enterprise income tax and value added tax, expected to take effect next year, drew considerable criticism at meeting of officials from various departments and sectors yesterday, with most arguing the provisions would discourage investment.
 
Many participants noted that the industrial zones would be the first victims. When the zones no longer receive any taxation favors, they will find it more difficult to attract new outside investment and encourage both current and potential investors to upgrade the infrastructure, they said.
 
Others opined that the new laws were wrong to cut preferential taxes for existing enterprises who want to expand their business to another area, but grant them to newly-setup enterprises.
 
A representative from the Dong Nai Department of Planning and Investment remarked: “When an enterprise wants to expand their business, that means that enterprise has done well. It is unreasonable to cut off the tax favors for this enterprise when it is setting up a new branch in another area."

"As a consequence of this action, no more investment projects will be implemented in areas in serious economic difficulties, such as the Central Highlands or the northeastern province of Lao Cai .”
 
The new laws also drew criticism for similar preferential treatment given to a big construction project and a foreign language center, given the scale of the projects and the quantum of investment involved.
 
The proposal to offer tax relief  for projects to build parking lots, and to entertainment  companies also drew widespread disagreement, with a majority believing it was not necessary at all.

Source: Tuoi Tre Newspaper – Translated by Truong Son

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