The Art of Taxation: A Conversation with Prime Minister Pham Minh Chinh on Special Consumption Tax Reform

In his concluding remarks, Prime Minister Pham Minh Chinh commended the Ministry of Finance for their work on the draft laws. Regarding the Law on State Capital Management and Investment in Enterprises, the Prime Minister instructed that the proposed amendments focus on addressing challenges and bottlenecks to effectively mobilize and utilize resources.

The law should build upon existing provisions that have had a positive impact, as well as proven and effective practices. It should also empower enterprises with greater autonomy and accountability, while focusing state-owned enterprises on their core strengths and essential sectors. Additionally, specific regulations should be in place for state-owned enterprises in the fields of national defense and security, with clearer delegations of authority and responsibility.

On the Law on Special Consumption Tax, the Prime Minister emphasized its impact on various industries, businesses, and citizens. He highlighted that this tax serves as a tool to guide consumption patterns and curb consumption of certain goods, but it should be aligned with Vietnam’s conditions and circumstances. He further noted the importance of policies to discourage the consumption of goods that may harm human health, the environment, or natural resources, as well as luxurious goods catering to high-end demands.

However, the Prime Minister stressed that policies must balance the interests of businesses and citizens while ensuring tax revenue for the state. There should also be a harmony between promoting production and business activities and curbing negative impacts associated with the consumption of these goods, ultimately safeguarding public health. Additionally, he advocated for tax incentives for sectors that need encouragement, such as the digital economy, green economy, circular economy, sharing economy, and knowledge-based economy.

The government leader also underscored the importance of a suitable timeline for implementing tax regulations, allowing affected entities to prepare accordingly. He further emphasized that tax adjustments should be coupled with strengthened efforts to combat smuggling and tax evasion, and that the drafting agency must provide convincing justifications for the proposed policies.

Concerning the Law on Corporate Income Tax, the Prime Minister stated the need to broaden the tax base, ensure accurate and timely collection, and combat tax evasion, especially in areas like e-commerce, catering services, and retail. He also emphasized the importance of promoting electronic invoices and leveraging information technology, digitalization, and innovation in tax management and collection.

At the meeting, Prime Minister Pham Minh Chinh instructed a thorough review of the scope of the aforementioned draft laws to prevent legal loopholes and ensure clarity without overlap or contradiction. He tasked the Ministry of Finance with incorporating relevant feedback to finalize the dossiers for submission to the Government’s law-themed session in August 2024, followed by presentation to the National Assembly for consideration and decision-making, thus ensuring both progress and quality.