Should higher taxes be levied on wealthy Vietnamese?

16-Jul-2019 Intellasia | Vietnamnet | 6:02 AM Print This Post

A reasonable tax rate which both encourages people to enrich themselves and increase the resources of the community is needed.

According to THE World Ultra Wealth Report of Wealth-X, Vietnam ranked third in the world in the increase in number of ultra wealthy people, understood as ones with total assets of over $30 million in 2012-2017.

As of March 1, the total assets of the five richest Vietnamese, as estimated by Forbes, was $13.6 billion, or 6 percent of total Vietnam’s GDP in 2018.

Prior to that, a report from Oxfam clarified the picture about inequality in Vietnam: the one-day income of the richest is higher than the income the poorest can earn over 10 years. The one-year income of the group of the 210 richest people in Vietnam is high enough to help 3.2 million people escape poverty and stop extreme poverty in the country.

Oxfam commented that Vietnam’s taxation system allows wealthy people to pay less tax, but they can get higher benefits from economic growth.

Meanwhile, the poor find it difficult to access full public services because of the lack of reasonable investments in education and healthcare services.

The proposal to raise the VAT tax from 10 percent to 12 percent, for example, is believed to have an impact on the poor more than the rich. The personal income tax is imposed on income attached to daily works (salary and bonus).

Meanwhile, the income of ultra wealthy people have low salary and bonus. Their major income is from transactions of trading investment tools such as bonds, stocks and real estate.

Experts said to find the reasonable tax rate for wealthy people, it is necessary to find out first who they actually are. Dinh Tuan Minh from VietAnalytics commented that Vietnam is lacking data to carry out taxation on wealthy people in the society.

The experts affirmed that it is not difficult to build a database about assets and income of over 90 million Vietnamese to identify who the rich are. National censuses and total land inventories, if taken seriously, can provide relatively reliable data.

The asset declarations made by civil servants could also be used for reference.

The other question that needs to be clarified is if Vietnam is ready to tax the rich. This is a burning issue, because the rich could be influential people in society who have close relations with state agencies.

Nguyen Van Duc, deputy director of Dat Lanh Real Estate, said that wealthy people have a more important voice in designing policies related to the taxation of properties of their own.


Category: Economy, Vietnam

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