A General Statistics Office of Vietnam economist Bui Trinh has opposed the Ministry of Finance’s proposal to impose a tax on houses valued from VND 700 millions. ( $30,700 ).
According to the ministry, a 0,4% tax would raise VND 31 trn ( USD 1.3 bn ) each year for the state budget. In their proposal, the ministry said that asset tax would play an important role in a country’s revenue, and a similar type of tax accounted for 3-4% of the total tax revenue in developed countries. This rate was 2% in Asia during 2005-2013 period.
The ministry suggested imposing a tax 0.3% or 0.4%.
Trinh claimed the situation in Vietnam was very different from other countries.
” Spending dose not account for 70% of that country’s total revenue like us. They don’t use tax money to build a welcome gate that is worth hundreds of billions or waste it on loss-making firms like Vinashin and Vinalines. Stop comparing Vietnam with other countries,”. Trinh said.
He went on to say that low-income people would be the hardest hit when house they have to work their whole lives for is taxes. Most houses in Vietnam costs around VND 1bn ( USD 44,000 ). Studies also revealed that most Vietnamese do not earn enough for daily living. The average monthly spending of Vietnamese people in 2016 was VND 2.6m ( USD 114 ) while the average monthly income was VND 2.4m.
“Tax is the enemy of GDP growth. Tax adjustment must be considered carefully for its impact on the people,” Trinh said.
An environmental tax on fuel and VAT are set to rise. He went on to say that the government must balance economic growth and social security.
“I once heard an expert comparing poor people to the last birds flying in a flock. If the leading birds leave them behind, then there may be no one left when they reach their destination,” he said.