Hanoi (VNS/VNA) - The General Department of Taxation’s plan oftaxing business households with annual revenue from 100 million VND (4,300 USD) iscausing controversy.

In the Document No 4965 regarding tax managementon business households who were subjects to presumptive tax, the tax watchdogwas asked to conduct a review on individuals and business householdsnation-wide subjected to tax management and impose tax on those earning revenuefrom 100 million VND.

Those mentioned even included individualsrunning irregular businesses such as motorbike drivers and vendors, who wereassumed to have an unstable and low income, which has triggered a stir.

In an explanation, Ta Thi Phuong Lan, DeputyDirector of the Individual Income Tax Management Department, said the taxwatchdog would only tax business households and individuals with fixed businesslocation and with annual revenue from 100 million VND.

She said checking people’s finance did notalways mean they must pay tax. Lan stressed that small business individuals whoearned revenue under the level for taxation would not be included.

It is estimated there were more than 580,000business households with fixed locations but not put under the management oftax agencies.

Lan said the review aimed to build a databasefor tax management including individuals like motorbike drivers, vendors,stevedores and small traders.

Still, the General Department of Taxation’sintention of taxing those with annual revenue from 100 million VND also cause acontroversy over its feasibility and effectiveness.

Dinh Trong Thinh from the Academy of Financesaid any business must be subjected to tax management, adding that it wasreasonable to conduct a review on the number of business households andindividuals to build a database.

Thinh said business households accounted forjust 2 percent of the total budget revenue but it was still necessary toenhance tax management. He added the collection of presumptive tax must beensured transparency to prevent unfairness.

Nguyen Khac Quoc Bao was quoted by TuoiTre online newspaper as saying the number of individuals runningbusiness like motorbike drivers or venders was large. It was necessary to knowtheir revenue for tax management but its also required significant time andhuman resources to do this.

Bao said the tax watchdog should compare thegain for budget revenue and the cost for collecting taxes on these subjects,adding that it would be more efficient to enhance tax management onmultinational enterprises and prevention against transfer pricing.

Currently, tax losses remained huge, Bao said,adding that enhancing tax collection on those who had low incomes wouldcertainly cause issues.

The General Department of Taxation’s statisticsshowed tax arrears totaled 79 trillion VND as of November 30, 2018.-VNS/VNA