HANOI, Aug. 22 (Xinhua) -- Vietnam's Finance Ministry has proposed lifting value-added tax (VAT) to 12 percent or 14 percent from the current 10 percent, leading to outcry of many experts and companies.
The VAT should be either 12 percent from Jan. 2019, or 12 percent from Jan. 2019 and 14 percent from Jan. 2021, the ministry's Tax Policy Department said on Tuesday, noting that the ministry prefers the first option.
Amid rising public debts, many countries in the world, including developed ones, tend to increase VAT and special consumption tax to compensate smaller budget collections from corporate income tax and personal income tax, the department said, adding that the average VAT rate in Laos, Cambodia and Indonesia currently stands at 17 percent, and that in the Philippines 15 percent.
However, many local experts and companies said that VAT hike will hurt not only low-income earners but also many goods producers and service providers.
According to them, the hike will result in a surge in prices of many essential goods, including food, foodstuff, household appliances, petroleum and oil, and charges of such services as health and education.
In 2015, Vietnam faced state budget overspending of 263,135 billion Vietnamese dong (11.64 billion U.S. dollars), or 6.28 percent of its GDP, according to the ministry.
