Experts warn
Talking to Lao Dong, Dr. Chau Dinh Linh - lecturer at Ho Chi Minh City Banking University - said that before discussing the taxation of deposit interest, it is necessary to solve many other important issues such as adjusting the family deduction level, reviewing the personal income tax rate and expanding the taxable tax rate for assets of high value such as beautiful license plate SIMs and license plates.
Taxing deposit interest rates may be suitable for developed countries, where the financial market has been perfected and the government encourages cash flow flow into investment and consumption instead of saving. Some countries also apply taxes but only for savings above a certain level to orient capital flows into production and business. However, in Vietnam, the financial system still depends heavily on banks. Savings deposits are not only a personal accumulation channel but also a source of capital for banks to provide credit for the economy.
Other investment channels such as stocks and corporate bonds are still not attractive and safe enough to completely replace savings channels.
Dr. Linh said: "If taxes are applied, cash flow can flow into gold, real estate or other speculative channels, causing an imbalance in the financial market.
In addition, the actual interest rate for receiving capital is not high due to inflation, if taxed, savings will be even less attractive, which can force people to withdraw capital from the banking system".
At the present time, it is necessary to evaluate carefully
Financial expert Chau Dinh Linh affirmed that the goal of tax policy is to ensure budget revenue, but at the same time, it is also necessary to maintain financial stability and create momentum for economic growth. Taxing savings interest at this time can reduce deposit motivation, making it difficult for the banking system to raise capital and affect credit flows in the economy.
Expanding the tax base is an inevitable trend, but it cannot be rushed to apply when the Vietnamese financial market is not really ready.
"This policy may be feasible in the future when the financial system develops more synchronously, but at the present time, we need to have a careful assessment to avoid negative impacts on the economy" - Dr. Linh said.
Proposal to tax savings interest causes controversy
Can Tho City People's Committee proposes to exempt personal income tax only for small-scale deposits, while large-scale deposits need to be included in the tax period to expand budget revenue.
On the contrary, Ninh Thuan province believes that it is necessary to continue to exempt personal income tax on interest on savings deposits, government bonds and long-term investments to encourage savings and ensure capital flows for the economy.
The Ministry of Finance has not yet proposed a specific plan but affirmed that all changes in tax policies need to be carefully considered to ensure the harmony between fiscal goals and financial market stability.
