At the workshop to announce Vietnam's tax equity report 2017 (Photo: VNA) Hanoi (VNA) – The Vietnam Institute forEconomic and Policy Research (VEPR) under the University of Economics andBusiness - Vietnam National University, Hanoi, on May 25 announced Vietnam’s tax equity report2017.
VEPR Director Nguyen Duc Thanh said the reportaims to give a full view of the budget collection system in Vietnam from theperspectives of developers and social activists.
The report focuses on evaluating the equity ofthe tax system, budget expenditures and tax administration issues as well asthe involvement of citizens in building and implementing tax policies, headded.
According to the report, Vietnam’s tax systemstill accounts for a relatively large proportion of the country’s grossdomestic product (GDP) with the State budget collection making up nearly 25percent of the GDP.
The budget spending often exceeds thecollection, making up close to 29 percent of GDP in 2016, after falling fromthe peak of 40 percent in 2009.
Researchers said Vietnam is facing difficultiesin balancing the State budget as the spending demand is increasing and theremoval of tariff barriers in free trade agreements (FTA) reduces the budgetcollection from import-export activities.
To reduce the State budget overspending,experts suggested increasing collection and reducing expenditures.
The Government should take drastic measures totighten regular expenditures such as streamlining and rearranging theapparatus, limiting expenditures for mass organisations, and speeding updivestment from State-run enterprises.
The quick reduction of direct taxes after 2011showed that the State budget collection heavily depends on consumption taxes,according to Associate Prof. Dr. Vu Sy Cuong from the Academy of Finance.
Any proposal to increase consumption taxesshould be taken in account because this might have negative impacts on equityin spending.
The proportion of indirect taxes is likely toincrease in the coming time if the draft Law on Value Added Tax 2017 isapproved.
The report also looks into the tax evasion andmanagement in Vietnam.-VNA
VNA
