Bui Dang Dung, a member of the NA Committee for Finance and Budget, spoke to Investment newspaper about why the NA had declined to vote on draft VAT . . .

But the NA is still able to provide preferential tax incentives for firms that build hostels and houses for students and workers. Why is it too complicated to define the criteria for low income earners in order to provide firms that invest in houses for this category of people with the same tax benefits?

NA deputies considered the issue carefully, and in the end they decided to not give preferences because they had fears that there would be inequality and that benefits would all go to the firms rather than directly to the people who need support.

What is your opinion?

I also disagree with tax exemptions and reductions for firms that invest in building social housing projects.

The Finance Ministry needs to revise, supplement and clarify issues that NA deputies still have questions about in order to persuade the NA to approve the draft law.

Many people said the State should provide support directly to the people who need it instead of funnelling the support through enterprises. What do you think about this?

It is very difficult and complicated to provide direct support to the people who need it at this time. It is much harder than providing indirect support through enterprises through the use of tax exemptions and reductions, along with the issuance of criteria, and setting standards on lease and home buying prices. But this does not mean it is impossible to find an optimal solution.

What is the optimal solution?

Although the student housing issue has been a pressing one for years, it is impossible to solve it overnight. Currently, 80 per cent of pupils and students are boarding at private houses and everything is still going on as normal.

Do you mean that preferential tax benefits for enterprises are unnecessary?

I want to say that a reasonable solution needs to be found that is better than giving tax reductions and exemptions to enterprises. Specifically, why don’t we promulgate incentive policies for the 80 per cent of students who are boarding at private houses. This should be done in parallel with the issuance of housing criteria and standards for students and labourers.

But is this merely an assumption?

It is not an assumption. I myself have surveyed areas with boarding houses for students and workers. I was told by landowners that they would be willing to expand their business if the State put forward specific criteria, standards and other incentives.

What incentives?

We have yet to think about providing personal income tax or corporate income tax exemptions for landowners who satisfy criteria and standards in lieu of providing the corporate and value added tax exemptions to enterprises.

The revised draft laws on Value Added Tax and Corporate Income Tax allow firms interested in expanding production and trade activities to enjoy corporate income tax preferences at the highest rate. If this is the case, then didn’t these firms suffer when the NA did not approve these draft laws?

Most NA deputies agreed to give maximum preference to these enterprises. The regulation, however, was not approved because it was part of the draft laws.

I think the Finance Ministry should present a draft law regarding the issue to the NA if it decides an amendment is necessary.

VietNamNet/Viet Nam News