The Commitment to Reducing Inequality (CRI) Index measures national efforts to reduce inequality via three criteria: social spending, progressive taxation, and labor policies.
According to the most recent edition of the index released in October, Vietnam ranks 99th out of 157 countries assessed in the study. Throughout the three indicators for CRI, the country's commitment to improving social spending on public services, health, education and social protection is ranked at 89th.
On progressive taxation, Vietnam performs the best, placing 46th. This criterion looks at whether countries impose different tax brackets for people from different financial backgrounds. Usually, the richest individuals and corporations are taxed more to redistribute resources. On labor policies, Vietnam takes the 126th position.
While faring well in the global context, Vietnam is still among the bottom 10 countries that are not doing enough to reduce their inequality problem in the East Asia and the Pacific region. Despite a strong record on poverty reduction in the past, increasing inequality is threatening the country's road towards a better future.
Citing a 2016's conference paper titled 'Social Change and Inequality in Vietnam,' Oxfam concludes that policies designed to reduce poverty among ethnic minorities in the poorest districts are ineffective, inefficient and non-participatory.
"A lack of investment in the education, health, and civic and political engagement of disadvantaged groups further undermines their prospects for a better future," writes the organization.
Despite a high ranking in progressive taxation practices, Oxfam emphasizes that the Vietnamese tax system is still currently working in favor of the more wealthy groups in Vietnam's society. The reduction of corporate tax rate from 28% to 20% in 2009 resulted in company profits being taxed at a lower rate than workers’ incomes.
"Companies are also receiving public subsidies in the form of tax incentives and tax holidays that further reduce their contributions. Furthermore, tax avoidance and evasion are also letting the richest multinationals off the hook and sucking money out of the budget," it adds.
When it comes to gender equality, there are still many issues. Women are more subjected to unskilled, untrained, low-wage works. A research in 2014 also reveals that Vietnamese male workers earn 33% more than female workers on average.
The report suggested a range of policies that Vietnam could consider to make its society a more inclusive one: make national taxation more progressive; increase allocations to public services; raise the minimum wage to a living wage level; expand social protection's coverage to all workers; close the gender wage gap; create an institutional environment for fairer public policy; and, empowering with citizens to claim their rights and monitor inequality as part of poverty reduction.
[Photo via Fabrik Brands]
