Proposal to exempt inheritance tax and some special income groups
The Law on Personal Income Tax (PIT) is in the process of being amended with many important proposals from ministries, branches and localities to adjust tax policies according to reality. In particular, determining tax-exempt incomes is a content that received many contributions.
According to the document synthesizing opinions of the Ministry of Finance, there are many proposals that it is necessary to adjust tax-exempt income to suit the actual situation.
The Ministry of National Defense proposes to exempt tax on income from performing scientific and technological tasks related to the production of weapons and defense equipment.
Meanwhile, the Ministry of Agriculture and Rural Development proposed tax exemption for share profits from agricultural cooperatives and individuals participating in the " Largefield" model.
The Ministry of Foreign Affairs proposes to add regulations on tax exemption for allowances for officials working abroad.
The People's Committee of Da Nang City proposes to exempt tax on income from inheritance and gifts of real estate registered between relatives in the family.
The People's Committee of Da Nang City believes that real estate and real estate are both compulsory assets that must register ownership and other rights according to the provisions of the 2015 Civil Code and other relevant laws. Therefore, it will not be consistent with the Law and in reality, distinguishing between income exempt from personal income tax from inheritance and gifts of real estate between close relationships without recording income from inheritance and gifts of real estate between close relationships.
Some localities also have notable proposals. Can Tho City People's Committee proposed to narrow tax exemption conditions to expand tax bases; at the same time, give an example to consider collecting personal income tax for households with high income from agricultural activities.
The People's Committee of Ninh Thuan province proposed to abolish taxes on inheritance because this provision is unreasonable and easily causes difficulties for people, especially when inherited assets do not generate regular income.
Adjust taxes according to income and investment type
According to Mr. Nguyen The Minh - Director of Personal Customer Analysis, Yuanta Vietnam Securities Company - adjusting tax policies needs to consider two important factors: taxable income threshold and transparency in cost deduction policy.
Mr. Minh said that it is necessary to review the taxable income threshold and adjust the tax rate reduction for the group of salary workers. If a high tax rate is applied to the middle-income group, this can have a negative impact on spending and investment.
"For the financial investment group, it is necessary to clearly distinguish between short-term and long-term investment. Accordingly, a higher tax rate can be applied to short-term investments (under 1 year) and tax exemptions for long-term investments, especially investments in funds, according to the model of the US, UK and Japan" - Mr. Minh said.
Dr. Nguyen Ngoc Tu - Lecturer at Hanoi University of Business and Technology - emphasized: "It is necessary to supplement regulations on personal income tax exemption for people who retire early when streamlining the state sector to work at non-state facilities.
This is to reduce the burden on receiving facilities, creating opportunities for new jobs for people quitting their jobs in the public sector".
Dr. Nguyen Ngoc Tu also proposed exempting personal income tax for first-time home buyers to support taxpayers and ensure compliance with international practices.
The Ministry of Finance, as the drafting agency, said that to ensure flexibility and proactiveness in accordance with the practical situation in each stage, the draft proposes to develop a Law proposing to empower the Government to regulate tax exemption for allowances not of salary nature (in addition to those listed in the Law).
