MEASURING LENDING RATE IMPACTS ON CORPORATE INCOME TAX

According to the General Department, taxes and fees now come from three main sources, namely indirect taxes (special consumption tax and VAT), direct taxes (corporate income tax and personal income tax) and import tariffs. As import duties are declining, the balance of the State Budget will depend on indirect and direct taxes. In the world, direct taxes are playing an increasingly important role in tax policy system in many countries, including both developed and developing countries. Although direct tax rates tend to be on the fall and many preferential policies are applied, the tax to GDP ratio tends to rise. In developed countries, direct taxes account for a large share of budget revenue. In the United States and Japan, direct taxes account for 74.8 per cent and 74 per cent, respectively. In Vietnam, corporate income tax valued VND52,191 billion in 2009, accounting for 19.3 per cent of total budget revenue or 3.15 per cent of GDP.

Respective numbers were VND82,297 billion, 22.5 per cent and 4.15 per cent in 2010 and VND96,600 billion, 22.4 per cent and 3.81 per cent in 2011. In 2014, orporate income tax was VND220,423 billion, accounting for 26 per cent of the total State budget revenue. Compared with other nations, the rate of corporate income tax in State budget revenue is quite low - a big room for Vietnam to increase corporate income tax for the State Budget.

Source: VCCI