Vietnam Delays Personal Income Tax Collection to Spur Spending

By Ta Bao Long

Feb. 9 (Bloomberg) — Vietnam will delay the collection of personal income tax until the end of May to help stimulate spending amid the global economic crisis.

Personal income including salaries, profit from real-estate and stock transactions and other investment returns won’t be taxed until May, the government said in a statement posted on its Web site today. The National Assembly will decide then if the payments will be waived completely or just delayed.

Vietnam’s economy expanded 6.2 percent in 2008, the slowest pace in nine years, as the global recession cut demand in the U.S. and Japan for Vietnamese exports. The government is targeting 6.5 percent growth for this year.

Vietnam will give a 30 percent discount on tax bills from the fourth quarter of last year and in 2009 for small and medium-sized firms, which have less than 10 billion dong ($572,000) in capital or employ fewer than 300 workers, the government said last month. It will also cut value-added tax by half in February for products including coal, construction materials, engineering equipment used to make other products, and automobile parts.

The country will lose about 1 trillion dong every month by “temporarily” not collecting personal income taxes for five months, the Tuoi Tre newspaper reported on Jan. 13, citing Deputy Finance Minister Do Hoang Anh Tuan.

Non-resident individuals won’t have to pay tax for income from financial investments, transactions, copyright and franchising until May, today’s statement said.

To contact the reporter on this story: Ta Bao Long in Hanoi at longta@bloomberg.net

http://www.bloomberg.com/apps/news?pid=20601080&sid=a6EcwRh24cbQ&refer=asia

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