IMF Tells Vietnam to Abandon Plan to Slash Corporate Tax Rate to 20 Percent

The Vietnamese Government must abandon its plan to further reduce the corporate income tax (CIT) to 20 percent in 2016, says the International Monetary Fund.

According to the IMF, the government could save revenues worth about 0.33 percent of gross domestic product (GDP) if it instead retains the 22 percent rate. The rate was already reduced from 25 percent this year.

The IMF also recommends broadening of the tax base through the introduction of a property tax, and including pensions income in the personal income tax base.

The country's tax revenues fell short of targets by about 1.5 percent of gross domestic product (GDP) last year, partly due to new exemptions and other tax incentives. The deficit has expanded to reach 6.5 percent of GDP this year.

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