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No delay in personal income tax law, house leaders say   2008-12-28 - ThanhNien

Declaring personal income tax at the HCM City Taxation Department (photo: Tuoi Tre).

The Personal Income Tax Law will take effect next Thursday as scheduled but the Party Politburo will take the final decision on how it will be enforced, the vice speaker of the Vietnamese parliament said Saturday.

There have been calls for deferment of the law because of its possible impacts in the context of an economic slowdown when the need of the government is to stimulate investment and boost consumer spending.

The law stipulates that the taxable income threshold is VND4 million ($238) monthly for both locals and foreigners working in Vietnam, with taxpayers allowed deductions of VND1.6 million (US$95) for each dependent.

National Assembly (NA) deputy chairman Nguyen Duc Kien said that the government and the NA would refer three proposals on implementing the law to the Politburo, the decision-making committee of the Communist Party, to make a final decision.

Under the first proposal, enforcement of the law will be postponed until July 2009 or January 2010.

During that time, the ordinance on high-income people would still take effect but grant a 30 percent reduction. Under the ordinance, people whose monthly income exceeds VND5 million have to pay income tax without any deduction for dependents.

Under the second proposal, a one-year waiver will be granted for incomes on capital gains and stock market transactions as well as those on the transfer of contributed capital and interest received on loans. A 30 percent personal income one-year tax cut for households and individuals who had been subjected to the corporate tax earlier is also included in this proposal.

The third proposal made by the NA has all taxpayers having their tax payment deferred until next October when the NA convenes its year-end session, for further decisions.

But the NA Standing Committee unanimously decided Saturday that the Personal Income Tax law would take effect on January 1, 2009 as approved at its plenary session in November last year.

Tong Thi Phong, another NA deputy chair, also said it was unnecessary to convene an extraordinary session to decide upon this issue.

The five-day session of the NA Standing Committee wrapped up Saturday in Hanoi.

Rush for tax code applications

By 4 a.m. on Friday, people were already queuing up at the Hanoi tax office, braving the chilly weather to submit applications to obtain tax codes.

Nguyen Thanh Loc, an employee of a Hanoi-based transport and forwarding company, said he had to get up half an hour earlier so that he could be the first to hand in the applications for his firm.

To his chagrin, however, he received slot number 28, meaning he could have to wait until the afternoon to have the applications processed.

Pham The Dung, who arrived at the tax agency on behalf of an animal feed company, said his lot number was 34 despite the fact that he had come at 5a.m.

Both Loc and Dung said they had to come early because they hadn’t been served during the previous days because of the large crowds.

Not as lucky as Loc or Dung, Linh, who represents the Hanoi Natural Science University, said she was not expecting her documents to be processed on that day because she arrived at the office only at 7:15 a.m.

“I might as well come tomorrow,” Linh said.

Every organization or company is required to hand in their applications by the end of this month so that their personnel are granted a permanent tax code.

Each organization has deputed its representatives to carry hundreds of documents to the tax agency where the personnel are understaffed, leading to an overload.

Many people have opted to come very early to pick up their slot numbers. We found a person at 3:30 a.m. on Thursday.

But many people have complained about the way the Hanoi tax agency has handled their applications, saying it had used only two out of 10 counters to receive them.

Only 32 firms were able to submit their documentation in a morning session, they said.

There was considerable pushing and shoving among applicants to get to the counter early.

The tax office was asking applicants to start from scratch the next day if their paperwork was not accepted within the day, said Nguyen Xuan Hoang, an Amway company employee.

Many people have resorted to staying in the queue no matter how hungry and thirsty they were, applicants said.  

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