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PIT collection to be tightened

HANOI – The Ministry of Finance is completing a draft decree on personal income tax (PIT) with stricter provisions designed to prevent tax revenue losses.

The draft Government decree requires dependents to register their own tax codes to prevent taxpayers from filing incorrect information, said Nguyen Van Phung, deputy director of the Tax Policy Department under the finance ministry.

“With such tax codes, tax officers can look at the database to make sure deductions for taxpayers are calculated accurately,” he said at a workshop on the Personal Income Tax Law held by Tai Chinh magazine of the finance ministry in Hanoi on Thursday.

Only the taxpayers whose dependents have tax codes are entitled to family deductions, said Ta Thi Phuong Lan, deputy head of the personal income tax division at the General Department of Taxation.

She predicted the number of tax codes would rise from nearly 20 million to around 50 million. However, it will take more time after July 1 to explain to taxpayers about this provision, she said.

Dinh Van Nha, vice chairman of the Finance and Budget Committee of the National Assembly (NA), remarked tax agencies were making deductions for taxpayers’ dependents without having sufficient information. For example, two members of the same family may declare their parents as dependents. “This leads to State budget revenue losses,” he said.

The amended Personal Income Tax Law will take effect on July 1. Individuals with a monthly income of over VND9 million are subject to personal income tax, with a VND3.6-million deduction per month for each of their dependents.

The finance ministry feared State budget revenue loss would rise to VND6 trillion when the amended law came into force. However, Nha forecast the loss would be as much as VND7-8 trillion this year and VND14 trillion in 2014.

“This will be a really big loss for the State budget at a time when multiple issues need State money,” he said.

Nguyen Thi Cuc, chairwoman of the Vietnam Tax Consultants Association, said more and more people spent lavishly on luxury items, yet they paid even a lower personal income tax than public servants.

 
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