Ministries requested to study US tax reform

Prime Minister Nguyen Xuan Phuc has asked ministries and relevant sectors to study the effects on Vietnam of the tax reforms US President Donald Trump signed into law last month.  
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The Ministries of Finance and Planning and Investment will complete the report and send it to the Prime Minister before March 1 this year.

ministries requested to study us tax reform
Workers at Safoco Foodstuff JSC are processing instant noodles. (Photo: VNA)

PM Phuc also assigned the Ministry of Industry and Trade to coordinate with relevant ministries and sectors to monitor policy responses of countries around the world as the United States implements the new tax reform law, assessing the impacts on Vietnam to help it respond appropriately and in a timely manner.

It is necessary to review the products Vietnam exported to the US, especially the products with the content of raw materials and components imported from China in order to give warnings and guide enterprises when the US imposes anti-dumping duties on these products, said the PM.

According to the PM’s economic advisory group, the US new tax reform package cut top corporate income rates to 21 percent from 35 percent. At the same time, it will tax foreign investment receipts transferred back to the country at the rate of 10.5 percent. With this tariff, the US has become the world’s lowest taxing country.

The advisory group of the Prime Minister said that the US tax policy in the immediate time may not affect Vietnam much, but in the long term it will impact the country, reported the online newspaper

As other economies apply defensive measures such as adjusting exchange rate policies, foreign exchange controls will affect foreign investment flows, thereby affecting Vietnam, especially the exchange rate, said the advisory group.

US President Donald Trump signed the tax reform package on December 22 last year. Analysts say this measure will improve corporate profits, boosting the economy.

Under the new tax law, up to 95 percent of Americans will receive tax breaks, but cuts to the rich will outweigh the tax cuts for lower income people. According to the Non-partisan Tax Policy Centre in Washington, it is estimated that households will receive an average tax cut of about 900 USD next year, but the top 1 percent will get a break of 51,000 USD on average.

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(Source: VNA)