VN’s tax-sourced budget collection rate is mean
VGP - According to a UNDP-funded economic report, Viet Nam’s fee and tax rates against GDP are 1.4-3 times higher than other countries in the region. However, Vietnamese officials as well as experts from the World Bank (WB) and International Monetary Fund (IMF) shared the view that the country’s tax-sourced budget collection is of medium level in the world.
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Statistics provided by the Asian Development Bank (ADB) in 2011 revealed that some countries, such as India, Thailand and the Philippines, based their calculation of tax-sourced budget mobilization on the figures provided by central governments only. Viet Nam has, in fact, totalized the figure from four levels, including central government.
According to the IMF in 2010, tax-sourced budget collection in the world averaged 28.7%. The rate of middle-income countries like Viet Nam was 26.4%. The current rate of Viet Nam is 26.7%.
In other countries, statistics used to determine tax-sourced budget mobilization rate come only from tax and fee collection. Meanwhile, in Viet Nam, revenues from crude oil export, land use fee and sales of state-owned houses are also added. If these revenues are excluded, Viet Nam’s fee and tax-sourced budget collection rates are similar to those in other regional countries.
Accordingly, if revenues from crude oil export, land use fee, sales of state-owned houses and foreign assistance in the 2006-2010 period were put aside, the state budget collection would account for about 20% of GDP. If revenues of foreign trade were excluded, the mobilization rate would stand at only 14%.
Mr. Habbib Rab, WB senior economist, said if actual calculation is made, fee and tax-sourced budget mobilization in Viet Nam is some 20% of GDP – a medium level in the world. The rate in some countries in the region mounts up to 40%.
Regarding corporate income tax, Viet Nam’s National Assembly has since 2003 lowered the rate from 32% to 25% at present. Meanwhile, the average corporate income tax of 83 countries around the world in 2011 was 27%, according to statistics from the Financial Strategy Institute.
Under the tax reform roadmap till 2020 approved by the PM, Viet Nam will gradually slash its corporate income tax. The Ministry of Finance is drafting amendments to the Corporate Income Tax Law and then submitting them to the National Assembly to approve in 2013.
By Ngoc Van
