FM to slash VAT and corporate tax on textile & garment sector

At a cabinet meeting convened by the Prime Minister of Vietnam, Mr Nguyen Dung, said that, since the Gross Domestic Product (GDP) had grown by only 3.1 percent, the lowest in many years, he would ask the National Assembly to revise the GDP growth rate to 5 percent and increase the scheduled budget over-spending to around 8 percent for 2009.

At a cabinet meeting held in October 2008, the government had decided to maintain GDP growth rate at 6.5 percent in 2009 and control over-spending to 4.3 percent compared to 4.8 percent in 2008, through cutting down expenditure.

A proposal to cut down Value Added Tax (VAT) was also put forth by the Finance Minister. He has suggested that VAT be reduced on yarn, fabric, garments, construction materials and automobile industries.

He also advised cutting down and exempting corporate income tax for small and medium enterprises and exempting personal income tax for low-income earners and announced that he would slash corporate income tax within nine months for enterprises that have capital of less than VND10 billion or less than 300 workers.

Amongst other measures to be taken up by the government; reducing the corporate income tax rate by 30 percent for textile and garment sectors, footwear and mechanical engineering enterprises, or extending the deadline for financial duties for importing enterprises.

Source: fiber2fashion