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HCMC proposes special tax on phones

Released at: 18:13, 07/05/2019

HCMC proposes special tax on phones

Photo source: vnmedia.vn

City sends submission to Finance Ministry on new taxable items, including luxury mobile phones.

by Jessica Nguyen

While mobile phones are not high-end products they should nonetheless be subject to a special consumption tax to guide suitable consumption, the Ho Chi Minh City People’s Committee wrote in comments sent to the Ministry of Finance on the draft “Scheme on Expanding Tax Bases and Preventing Erosion of State Budget Revenues”.

The city proposed its local tax law drafting agency study the application of special taxes on certain new taxable items, such as mobile phones, cameras, perfume, cosmetics, online games, and beauty care services.

Perfume and beauty care services should be subject to special consumption taxes because they can be classified as “luxury goods and services”. This would help it to obtain more taxes from a portion of the population earning higher incomes.

Though recognizing that mobile phones are not classified as “high-class goods and services”, the city’s People’s Committee wrote that they are not “essential” either. Therefore, the inclusion of a special consumption tax would guide reasonable production and consumption.

“Mobile phones are essential for communication, but luxury phones should be included in the special consumption tax regime to regulate the incomes of higher-income earners,” the city wrote. “These are people who regularly change to new generation electronic goods.”

The People’s Committee also proposed the study and supplementation of environmental protection taxes on batteries and herbicides. These are goods that, in the process of manufacturing and use, pollute the environment, and so also need to be taxed to guide reasonable production and consumption.

Along with economic development, it wrote, it is necessary to continue evaluating goods that should perhaps be subject to environmental protection taxes.

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