Vietnam Proposes Wide-Ranging Tax Reforms

by Mary Swire, Tax-News.com, Hong Kong

22 August 2017

Vietnam's Ministry of Finance has proposed a number of changes to the country's tax regime, including a hike in value-added tax, a new tax on sugary drinks, higher duties on tobacco products, a reduced corporate income tax rate, and revised personal income tax rates.

VAT could be increased from 10 percent to 12 percent starting in 2019, with a possible further hike to 14 percent from 2021. Significant changes are expected to be made to reduce the number of goods and services subject to the five percent reduced rate of VAT or the zero rate.

Other proposed indirect tax changes include the introduction of a 10 or 20 percent levy on sugary drinks from 2019, and higher taxes on cigarettes and large vehicles.

Vietnam is also considering lower rates of corporate income tax for small- and medium-sized firms.

In a further announcement made on August 17, the Ministry of Finance has also proposed reducing the number of income tax bands, with rates of five percent, 10 percent, 20 percent, 28 percent, and 35 percent reportedly proposed.

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