VietNamNet Bridge – While the government weighed and measured out every dong of the bailouts to businesses, ministries tried everything they could to impose higher charges and fees on enterprises, which were nearly at the point of death.

One car carries 12 kinds of fee on its back

In early 2012, Minister of Transport Dinh La Thang suggested to collect 20-50 million dong a year from every up-to-9-seat car and 500,000-1 million dong a year from every motorbike in five cities (Hanoi, HCM City, Can Tho, Da Nang and Hai Phong) which aims to restrict the number of private vehicles in circulation.

Thang also suggested collecting 30,000-50,000 dong on the cars going into the inner city in rush hour.

If the suggested fees are imposed, every car would carry 12 kinds of fees on its back, while every car owner has to pay 60 million dong in tax and fee on average. This means that after five years, the taxes and fees car owners have to pay would be equal to the value of a second hand Matiz.

Luckily, the Ministry of Finance, on the last days of the year voiced its disagreement to the suggested kinds of fees. However, car owners might miss a beat when hearing the suggested plan.

However, car owners could not avoid the road use fee, which would be collected as of January 1, 2013.

A sedan owner would have to pay 1.56 million dong a year, or 130,000 dong a month, while a motorbike owner 50,000-150,000 dong a year.

Personal income taxation threshold: 7 million dong or 9 million dong

Under the current tax law, the taxation threshold is 4 million dong, while the rebate is 1.6 million dong a month for every dependent family member.

In March 2012, the Ministry of Finance opened the draft tax law to the public opinion, suggesting raising the taxation threshold to 6 million dong and the rebate to 2.4 million dong.

In July, the figures written down in the report to the National Assembly were 9 million dong and 3.6 million dong.

However, just one month later, the levels were slashed to 7 million dong and 2.8 million dong. The National Assembly’s Finance and Budget Committee, which put forward the levels, said that the overly high taxation threshold would lead to the loss of income to the state budget.

Businesses want tax exemption, MOF only allows tax payment delay

The government launched a lot of bailouts in 2012 in order to rescue businesses which got bogged down in the economic recession.

The most popular solution was ease the financial burden on businesses by exempting and reducing tax and fee. However, businesses were not interested in the bailouts.

The problem was that the businesses could only delay the tax payment, while they could not exempt from the taxes.

Since January 1, 2012, the car ownership registration tax raised to 20 percent in Hanoi and 15 percent in HCM City. Five months later, the Vietnam Automobile Manufacturers’ Association shouted for help, proposing to slash the tax to five percent, or manufacturers would have to stop production.

The Vietnam Steel Association has insisted on the VAT reduction from 10 percent to five percent to help stimulate the demand, saying that the VAT tax payment delay for six months would not have much significance.

Businesses have called on to reduce the corporate income tax from 25 percent currently to 15-18 percent for 3-5 years.

However, all the proposed tax and fee adjustments could not be made in 2012.

US$1 = VND21,000

Pham Huyen