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Controversial Tax Increase on Hold as Gov't Sets Its Sights on High Economic Growth

Vietnam's central government has ordered the Ministry of Finance to put the brakes on a series of controversial tax hikes.

According to VnExpress, the government believes the proposed tax increases would make it harder for the country to achieve its goal of 6.7% economic growth this year.

The finance ministry recently proposed an increase of the value added tax (VAT) rate from 10% to 12% in 2019, in addition to various other hikes. This plan was pitched as an effort to make up for budget shortfalls the body says will appear once Vietnam carries out trade commitments to remove import tariffs.

National leaders are striving to meet their set GDP growth target. For example, the news source shares, the Ministry of Industry and Trade plans to increase the amount of crude oil it will extract this year in order to bring in more revenue.

However, some independent experts believe growth of 6.7% is already out of reach. HSBC has lowered its forecast for this year to 6.4%, while the Asian Development Bank, World Bank and International Monetary Fund predict growth of 6.3-6.5%.

[Photo via Shutterstock]


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