5 Research Methodology INTRODUCTION Urgency of the research Adjustment of income tax is one of the important requirements of adjusting tax policy system Although having some initial achievements, the process of adjusting income tax in accordance with its commitment of joining the World Trade Organization (WTO) of Vietnam still needs further adjustments The thesis used following methods: statistical, aggregate, classify, sort, compare, compare, analyze , evaluating methods to draw comment for researching thesis In addition, the thesis also used econometric methods, models, graphs to assess both the quality and the quantity of research results New contributions of the thesis Therefore, Vietnam’s adjustment of its income tax as a WTO members are topically and urgent matter The new contributions include: Systemarization of a theoretical basis for adjusting income tax; assessment of the situation and the issues that need further adjustment; proposing solutions to adjust income tax Overview of topic-related research Structure of thesis While tax reform is at its first step, there has been a large number of articles about Vietnam 's tax policies However, those articles almost focused on clearly explaintation of tax as a tools should be used to adjust income tax or focusing on analysis and proposing solutions to improve tax policy generally and therefore lacking of deep analysis and proposals to adjust income tax when Vietnam is WTO member In addition to the cover , table of contents , list of tables , acronyms and graphs , the introduction and conclusion , list of published works relating to the thesis , the list of documents references and appendices, the thesis includees 03 chapters with 06 tables and 13 figures The research purpose of the thesis The purpose of the thesis is to answer the following research questions : Rationale for income taxes and income tax amendments as WTO member; Situation analysis of income tax amendments in Vietnam as a WTO member; solutions to further adjustments of income tax until 2020 Subjects and scope of the thesis Research’s subjects of the thesis are income tax and income tax amendments when Vietnam is a member of the WTO Scope of thesis: the thesis focused on research of 04 basic adjustments of income tax in the context of WTO member: determining taxable income; determining deductions or deductible expenses for income tax calculation purposes; the income tax rate and income tax incentives Study period : from 1991 to the present and focuses on the period from 2007 to date after Vietnam became a WTO member Proposed adjustment solutions for income tax until 2020 adjustment; Building plans and roadmap for achievement; Building draft for text adjustment; Seeking comments and completing regulatory documents; Submiting to authority for approval and promulgation adjusted income tax policy CHAPTER 1: GENERAL THEORY OF INCOME TAX AND INCOME TAX AMENDMENT IN THE CONTEXT OF VIETNAM JOINING WORLD TRADE ORGANIZATION ( WTO ) MEMBER 1.1 Income tax and income tax amendments 1.1.4 The impact of income tax amendments 1.1.1 An overview of income tax and income tax amendments The impact of income tax policy adjustment has the highest social benefit when expense is equal to buying power of people and individual goods’ prices suit public goods Income tax is a direct tax levied on real income of the individual or entity Income tax plays a very important role in ensuring revenues for the State budget and in implementation of management, macro-regulation functions of the State in terms of economic and social activities in the whole national economy The principles of levying income tax : Taxing on the basis of taxable income; progressive taxation ; selectingg time to determine taxable income Income tax is classified as corporate income tax (CIT) and personal income tax (PIT) 1.1.2 Contents of income tax amendments The concept of income tax amendments: Income tax amendments are amendments, supplements and completation of the income tax regarding both income tax policy and income tax administration in order to achieve income tax management’s objectives Contents of income tax amendments : Adjustments of income tax policies have a number of different contents; however in this thesis, the researcher focused on 04 following basic contents: regulations on determining the taxable income, regulations on determining deductions or deductible expenses in calculating income taxes, regulations on tax rates and regulations on determining the tax incentives 1.1.3 Principles , methods and processes to adjust tax Principles of income tax amendments : Ensuring fairness and transparency; Associating with the policy and economic development policy in certain historical period; Covering revenues; Ensuring the flexibility Adjustment method: Direct and Indirect adjustment method, Administrative and non- administrative methods; Passive and active method 1.2 Requirements, conditions and roadmap for income tax amendments in context of Vietnam being a WTO member 1.2.1 Overview of the WTO WTO is an international organization established in 1994, which set out the rules regulating commercial activities of member countries on the world scale WTO has three main agencies which are the Ministerial Conference, the General Council and the Secretariat whereas the Ministerial Conference and the General Council are decision-making agencies Members of the WTO are countries or customs territories which have economic autonomy 1.2.2 The requirements of income tax amendments as a WTO member Requirements "Non discrimination" : the adjusted income tax rate for domestic entity and individual are also applied for business entity or individual of other member countries Requirements "Trade liberalization": This principle promotes the reasonable and fair adjustment and application of a tax rate and the regulations of taxable income, tax exemption and tax incentives Requirements of creating an environment of fair competition: WTO requires its members not to use the corporate income tax as a form of business subsidies for export performance Transparency Requirements: WTO requires its members to implement measures to ensure transparency Government and its members have to publicize the income tax system and to ensure the public as well as domestic and foreign enterprises can easily access that system Adjustment Process: including steps : Review and preliminary policy; Analysis and assessment; Determining target, method and content for Requirements "supports for developing and least developed countries": the positive impact to the income tax adjustment For example, the income tax system needs to be amended in order to be in accordance with international practices as well as to have roadmap to ensure the harmony of interests of States and enterprises 1.2.3 The requirements and roadmap for adjustments of the income tax in the context of Vietnam joining WTO The requirements : - Subsidies for industries and businesses in the manufacturing and export area must be withdrawn - Local and Foreign persons and legal entities must be treated equally 1.3 International experiences and lessons for Vietnam to adjust income tax in terms of WTO membership 1.3.1 International experiences for income tax amendments in the context of being a WTO member - International experiences on adjusstment of regulations for determining the taxable income: + CIT: supplementing income from transfer projects, exploration and exploitation rights, mineral processing, transfer capital contribution rights, the project participation rights, the business right to the taxable income - The protection of intellectual property rights, the application of taxable value, interventions of investment and trade must be respected and law enforced + PIT: Generally, regulations on taxable income of other countries are relatively in common and cover all types of income However, the scope of income tax exemption also differs depending on the orientation of each country’s policy - Being transparent by publicing the draft legal text of the Government and local governments on the mass media for public comments - International Experiences for adjusting regulations on deductible expenses or other deductions when calculating income tax: Roadmap for the acceding countries: will be set up according to the situation and context of actual negotiations with the Member States + CIT: Tax laws of other countries all allow the deductions for actual expenses incurred related to manufacturing and trading activities of business enterprises which have invoices, documents They also encourage expenditures for research and development, training; controlling customer-care expenditure and not allowing personal expenditures 1.2.4 Factors affecting the income tax adjustment as a WTO member The objective factors: - The domestic and international economical and social situation - The expenditure needs of the State Budget also affect the implementation of the commitments of reducing the tariff lines and the implementation of income taxes unitedly and equally - The conditions of the facilities of participating countries also greatly affect the implementation of the commitments, especially commitments on income tax The subjective factors: - Determination to implementing tax adjustments of the Government and law enforcement agencies - Qualification of officials and solidarity who are responsible and related to the enforcement of income tax commitments as a WTO member + PIT: Most marital deductions applicable to personal income tax in other countries are divided into three groups: i) general deductions for taxpayers themselves; ii) the deductions for their dependents such as reductions for children, spouses and parents and iii) specific deductions - International experiences for adjusting income tax rate: + CIT: In general, the corporate income tax rate adjustments in other countries have been carried out in the tendency of decreasing + PIT: In recent years, many countries have reduced tax rates to improve the attractiveness of the investment environment in the country, attracting high skill workers from outside while some other countries also reduce the tax brackets - Propaganda and guiding commitments - International experiences for adjusting regulations on income tax incentives: Tax incentives is the way one country issues a favorable tax policy than other countries in order to attract investment The generally applied incentives forms includes preferential tax rates, allowing losses transfer, time-limited tax exemptions, tax credits reductions, allowing accelerated depreciation 1.3.2 The lessons for Vietnam to amend income tax in the context of being a WTO member - Adjusted taxable income must be clear, transparent and easy to implement Income tax systems of most countries are complying with general requirements of the WTO, to ensure fairness and transparency - Income tax rate should be adjusted decreasingly to support revenues Reduced income tax rates will encourage investment in the country as well as attracting foreign investors and consistent with the average level of other countries in the region For personal income tax, due to different economic – social conditions of each country, the calculation of personal income tax is also different - The income tax reductions/exemptions must be public and targeted to specific objects All countries identified reductions/exemptions of income tax for objects who are generally responsible to nurture other objects However, the reductions/exemptions does not applied to all the poor or difficult because this group will be assisted by other charitable or subsidy programs - The income tax incentives must be reasonable with each period The income tax incentives depends on the conditions and purposes of government in creating incentives for each country However, the given preference must ensure fairness between objects, ensuring compliance with international standards in order to assist the difficult as well as in accordance with the WTO CHAPTER 2: PRACTICAL EXPERIENCES OF INCOME TAX AMENDMENTS IN VIETNAM IN THE CONTEXT OF BEING A MEMBER OF WORLD TRADE ORGANIZATION (WTO) 2.1 Commitments, condition and periodicity in amending Vietnam income tax in the context of Vietnam joining WTO 2.1.1 Participation of Vietnam in WTO Negotiation procedures of Vietnam’s WTO participation could be divided into four steps: - Firstly, on 04/01/1995, Vietnam officially sumbit the Participation Letter to WTO On 31/01/1995, WTO General Council set up a Working Team (WP) including 40 people from member countries in different economics - Secondly, In October 2003 Vietnam submitted to WP a Welcome report on goods and services, action plans (AP), including AP in law building, CVA, TBT, SPS, TRIMs, TRIPs - Thirdly, the dossior of legal agreement in the WTO participation of Vietnam was drafted from Round of WP when the prepartion of draft report of WP (DEFR) was agreed - Forthly, according to the Notice on 12/12/2006 of WTO Secretariat, on 11/01/2007 Vietnam has officialy become the 150th member of this important organization 2.1.2 Amendments of income tax before participating WTO - CIT: In pre-Doi Moi period, Vietnam kept the budget deduction regime because economic organizations used assets of the state These deductions were adjusted by decisions of minister committee (the parliament now) After Doi Moi, Vietnam promulgated Profit Tax in replacement of deduction regimes, which initially organizations from all sector had equal tax declaration and payment in comparison with state sector - PIT: From 1991, Vietnam introduced Ordinance on high income earner, in 20001 and 2004 tax content for high income earner was adjusted however the achievement amendment was not high 2.1.3 Commitments, conditions and periodicity in amending Vietnam income tax in the context of joining WTO - Requirements on income tax amendment + “Non discrimination”: a country should not discriminate between “most-favored-nation” or MFN; domestic and foreign products, services or nationals; development of market economy The intervention mechanism to commerce and investment must be in accordance with signed bilateral and WTO agreements + Vietnam must show its active participation by bilateral negotiation result with WTO countries member and commit in abolishing subsidies and unfair supporting mechanism in business + “Freer barrier”: open privileges in doing business for foreigner individuals and enterprise as local ones even in export and import - Vietnam must declare implementing international laws equally such as protection in copy rights, tax bases and intervention methods in commerce and investment after its participation in WTO + Creating fair competition in Vietnam: abolish subsidies, tariffs and other forms of protection such as export promotion to support exporting sector and enterprises - The periodicity for Vietnam would be outlined in the first 12 years from the participation year being a non-market economy After that deadline the economy reform would be considered in comparison with other economies + Transparency: Vietnam should submit commitment in tariffs, when market is opened the tax rates should not exceced the committed tarriffs 2.2 Income tax amendments of Vietnam in practice in the context of being WTO member 2.2.1 Income tax collection in period of 1999-2012 Table 2.1: Average commitment in tax rate Unit: % Deduction Tariffs deduction in Committed Committed Current Uruguay Round compared tariffs for Sector tariffs in MFN with WTO Average final tariffs current Developed Developing participation period tariffs Countries countries Agriculture products 23,5 25,2 21,0 10,6 40 30 Industrial products 16,6 16,1 12,6 23,9 37 24 Total 17,4 17,2 13,4 23,0 - Income tax collection in period of 1999-2007 Revenue collection increased continuously, next year collection was higher than last year collection by about 15-25% CIT played a considerably important percentage in total revenue, which accounts for about 24-25% In the meantime, collection from high income earner (Personal Income Tax now) was only about 1,9-2,3% of total collection - Income tax collection in period of 2008-2012 Revenue collection in this period still increased but unstable For example, in 2008, 2010 and 2011 revenue collection reached by 20%, however those in 2009, 2012 only were 3-5% Collection from PIT increased lastly in comparison with total collection Its percentage is about 5-6%, increasing by 2-3% + “Supporting for developing and less developed countries” When state revenue is affected by export and import collection the income tax amendment should balance the deduction - Commitments in income tax amendment of Vietnam for WTO participation 2.2.2 Contents of Vietnam income tax in the context of being a member of WTO - Amendment of taxable income: + CIT: More transparency, from 1/1/2009, taxable income was divided to income from main bussines and income from other bussses + Vietnam must develop the market economy and support the 10 + PIT: On 21/11/2007, National assembly promugated Personal Income Tax in replacement of tax for high income earner The new PIT included individual and household business from CIT subjection to PIT subjection - Amendment in deductible expenses: + CIT: restriction in fast depreciation not exceed times; deductible expense include expeditures in eduction, training, increasing the threshold for entertaiment expenses to 10%; + PIT: increase deductible expenses for income form business; income from employment of residents such as social insurance and medical insurance - Tax rate amendment: + CIT: From 2007 to 2008, normal tax rate of 28% was applied for all enterprises From 2009 to now, PIT tax rate has been adjusted from 28% to 25% + PIT: From 2009, the replacement of new CIT tax for tax on high income earner did not change PIT collection volume However, in 2010, PIT collection increased by 83,6% - Affects of personal income tax and corporate income tax to individuals and businesses The author has conducted a survey on businessses, individuals by applying SPSS to analyze affects of amending two tax types on subjects respectively Amended corporate income tax and personal income tax has decrease the price of individual goods and public goods in acccordance with customer expenditure as describled in picture 2.5 Variable Co-efficient: + PIT: CIT Law in 2007 has applied progressive tax bracket and statutory tax rate for residents and each rates for each income for residents and nonresidents - PIT tax exemption: Being WTO member from 1/2007, Vietnam has abolised tax allowance for exporting textile companies For enterpises whose tax allowance was cancelled , from 2012 could decided to earne allowance for remaining period in respect to its curent condition 2.2.3 Method and procedure for amending income tax in Vietnam practice High belief threshold Note: - Variable 0001 is variable of changing corporate income tax and personal income tax Lag - Amemding method: based on surveys, opinion to select proper content before promugating Therefore, management body can review and summarize income tax policy implementation for proper amendment - Amending procedure: Follow steps in law issuing 2.2.4 Affects of income tax amendment to Vietnam in the context of being a member of WTO - Revenue collection: Picture 2.5: Result after amending corporate income tax and personal income tax 2.3 Evaluation on Vietnam income tax amendment in context of being a member of WTO 2.3.1 Positive effects on Vietnam income tax amendment in context of being a member of WTO - Meeting WTO requirements: Vietnam income tax amemdment has a transparent, explicitly, fair and non-discriminable route + CIT: From 2007 when Vietnam joined WTO, PIT increased significantly Although in 2009, tax rate was adjusted from 28% to 25%, business household and business individual are excluded from CIT (to PIT), PIT collection in that year decreased but increased in following years - Meeting the committed roadmap: Vietnam income tax amemdment has been implemented step by step, fairly, efficiently in accordance with committed route in next 3-5 years supporting as a developing country 11 12 - In accordance with Vietnam practice and current legislation: Amendments on personal income tax and corporate income tax does not affect significantly to taxpayers, taxbearers, goods supply and demand CHAPTER 3: SOLUTIONS TO INCOME TAX AMENDMENT IN THE CONTEXT OF VIETNAM JOINING WORLD TRADE ORGANISATION (WTO) 2.3.2 Negative effects on Vietnam income tax amendment in context of being a member of WTO 3.1 The international context and the income tax amendment trend in the context of Vietnam joining WTO until 2020 - Taxable income: 3.1.1 The international context and Vietnam situation + CIT: The corporate income tax law does not regulate whether income from project transfer, transfer of right on exploring mineral resource, transfer of equity contribution, income from business advantage are covered by the law - The international economic integration has been complicatedly taking place in terms of economic and political factors due to the influence of great economic forces + PIT: the law does not cover income from authorizing house sale, land whose authorizer has the right on deciding assets - Since Vietnam joined WTO, the international economic intergration, both in the past and in the future, has been being multipolar and multi-area - Deductible expenses: + CIT: Thin capitalization has not been regulated to ensure the correction purpose of using equity contribution and the safety of economy + PIT: Family allowance is unflexible, some expidture on medicine, education of dependents is undeductable - Income tax rate: + CIT: The reduction of PIT rate for medium and small businesses has unclear route Besides, the criteria for determination of SME mainly rely on equity and lobour, which is not correct and follow the international practice + PIT: Regulation of PIT on stock transfer with two taxing method still has disadvantages - Corporate income tax incentive: Unexplicitly, misunderstanding in implementation Besides, the goverment should include additional review on supporting sector, industry and regulate more allowance for expending business and allowance for income from transfering certificate on pollution reduction 2.3.3 Reasons for Negative effects on Vietnam income tax amendment in context of being a member of WTO Uneffective self-assement machinism, cash economy, policy reviews 13 3.1.2 The income tax amendment trend in the context of Vietnam joining WTO until 2020 - Countries applied private capital economic model which are leaning on the development of giant economic corporations would rather corporate income tax than personal income tax - While, the trend in medium and small economies are in the favour of the amendment of applying progressive tax rate which may support medium and small enterprises - The school of salary fund taxing (i.e the United State) increases tax rate with the aim of boosting social benefit while reducing business taxes to enhance their business competitive ability - The new members of WTO want to encourage investment, to attract more capital and to open more their markets usually employ low tax rate 3.2 Targets and viewpoints of income tax amendment in the context of Vietnam joining WTO until 2020 3.2.1 Targets of income tax amendment until 2020 - General targets: The Vietnam Tax System Reform and Modernisation period 2011-2020 stated: The target of Vietnam income tax amendment in the coming years is represented in new income tax type, taxpayer, tax rate, taxing point, tax structure, 14 - Detail targets: + Corporate income tax: reduce tax rate under an appropriate route; simplify incentive policy by narrow investment area which need to be encouraged; supplement regulation on deductible expense, + Personal income tax: Amend and supplement with expanding tax base and clarifying taxable income; simplify the taxable method of each type of income; adjust the number of tax rate to make it appropriate to types of taxable income and taxpayers,… enterprises to convert corporate income tax incentives as export incentives abolished is very important Other incentives should continue to be researched to promote the development of industries, sectors and localities where need to encourage investment However, it is necessary to ensure WTO’s principles of similarity and non-discrimination 3.3 Solutions to income tax amendment in the context of Vietnam joining WTO until 2020 3.3.1 Solutions of income tax policy amendment - Taxable income amendment: 3.2.2 Viewpoints of income tax amendment until 2020 - Taxable income admendment: In the context of international integration, there are many types of corporate income and personal income which appertain taxable income but have not been interpreted in the Vietnam Corporate income tax and Personal income tax Therefore, the viewpoint of income tax amendment should be expension of scope of taxable income in order to continuously integrate, ensure fair competion and be appropriate to the WTO’s similarity principle - Amendment of deducted expenses: Currently, Vietnam has become a WTO member, hence Vietnam must amend tax policies consistent with the principles of WTO On the other hand, because of the competition of FDI attraction, Vietnam income tax must be relevant to international standards which help foreign investors easily operate their business in Vietnam Therefore, the Vietnam income tax should be harmonized with international standards and internationally collaborative - Amendment of income tax rate: With the aim of the income tax system harmonizing both the interest of the taxpayer and the State, Vietnam should have specific scientific researches to provide appropriate income tax rates In particular, it should analyze the tax burden of different social groups in order to accordingly amend tax policies The income tax system in our country should harmonize tax rate within the limits of 15% to 50% - Amendment of Income tax incentives: It is necessary to continuously thoroughly understand the principle of non-tax incentives to exporters Since Vietnam joined the WTO, after years, Vietnam has to eliminate incentives to all goods other than textiles abolished since 2007 Therefore, guiding 15 + CIT: It is necessary to add income from transfer investment projects, income from transfer of exploration, mining and mineral processing right, income from transfer of the right of contributed capital, the right to participate in the project and "provision reversal" to other income when determine taxable income + PIT: this type of tax should be amended and supplemented in the way of abolishing allowances, subsidies currently unavailable (social security benefits) and salary-natured subsidies (area subsidy, attractive subsidy), simultanously add contents: "and other subsidies, allowances which is not salary-natured" to ensure the law does not become outdated when new subsidies, allowances are found - Deductible expense amendment: + CIT: Vietnam should amend or supplement conditions of expenses deducted: certificate of bank payments for purchases of goods and services worth twenty million VND or more In terms of the advertising cost and sales promotion, in order to match reality and reflect the nature of expenses, researches are needed to increase the controlled percentage up to 20% and check and eliminate some expenses out of controlled cost, + PIT: With the aim of being relevant to the policy of reducing the rate of mobilization of taxes, charges and fees in the Tax Reform Strategy period 20112020 and perspectives, objectives and requirements of the amendment, supplement of the PIT law, it is necessary to raise the personal allowance from million/month to million/month (96 million/year) and the dependent allowance from 1.6 million/month to 3.2 million/month 16 - Tax rate amendment: 3.3.2 Solutions of amendment method + CIT: study to reduce the tax rate from 25% to 22%, for small and medium businesses (possibly defined by the criteria of annual revenue lower than 50 billion VND and profit no more than 05 billion) are 20% tax rate + PIT: individuals earning income from salary, wages can be applied as the current tax rate In terms of business income or income of independent practitioners, researches are needed to apply the tax rate based on annual revenue without allowance deduction Accordingly, 03 rates can be suggested: 1% for individuals conducting trade business, 3% for production sector and 5% for the service sector - CIT incentives amendment: + Industry incentives: the additional regulation on invested enterprises producing industrial supportive products applied the 20% of tax rate on incomes is needed This income is not applicable for exemption or reduction In addition, it is necessary to add regulation on tax exemption, tax relief for investment in installation of new production lines, expansion of production scale, innovation in production technology + Tax incentives for enterprices with abolished export incentives: it should be regulated if preferred choice of switching from the date of businesses licensed establishment certificate before the date the Decree No 24/2007/ND CP taken into effect does not need to synchronize the incentive income tax rate with the tax exemption and tax reduction Enterprises fully undermined the time of exemption and reduction no longer handle again If the incentive tax rate is still available, enterprises have the choice of switching to preferential tax rates under other conditions + Requirement on transparent intepretation of tax incentives : To be consistent with the orientation of investment encouragement, it is necessary to amend or supplement terms of preferential subjects regulated in the Law on CIT - Applying the method of Regulatory Impact Assessment (RIA) as amending income tax system in benefit groups and associated costs: Through RIA analysis, the authors propose amendments of PIT and CIT in different levels such as: Tax waivers for small and medium enterprises; Reduced tax rates of CIT to 20% - 22%; Increase in the deduction for salary and business income earners; Allow tax deductible corporate income tax and personal income tax and other tax to avoid double tax; Add the taxable income sources - Applying the overall balanced model to define sectors and subjects to tax: Income Tax Law was enacted, in order to come into practice, the law should be adjusted so as to ensure the effectiveness In the long term, income tax will account for a large proportion of the revenues of the budget, thus it should be required to apply overall balance model before defining the subject, industry sector or individual to collect taxes, tax waiver, tax exemptions to ensure fair, transparency and efficiency of tax policy 3.3.3 Solution of amendment process In the process of drafting decrees, circulars guiding the Law on use of non-agricultural land tax, to deploy the practical experience , General Department Taxation (GDT) has piloted the the non-agricultural landuse tax policy in provinces: Ha Noi, Can Tho and Bac Ninh Through the pilot, GDT can draw some experiences in implementing the revised policy for income tax on the object selected pilot and pilot organizations 3.3.4 Supportive Solutions - Synchronize the tax administration mechanism and other related policy mechanism: Research and apply Advance Pricing Aggrement mechanism in Vietnam; Complete and comprehensively reform mechanisms and policies on landuse management, cashless payment, business registration, registration on import and export, accounting and price + Requirement on transparent provisions of some income is not tax incentives: To meet the practical requirements and solved problems of enterprises, it should specify incomes are not entitled tax incentives The other income related to production and business activities are tax incentives, other than income from capital transfer or assigning the contribution - Solution to taxpayers: Strengthen taxpayer service; Encourage and promote tax consulting, accounting, auditing services and tax agents 17 18 - Solution to the tax authorities: Further reform income tax management system; Enhance training tax officials; Mounting responsibilities and salary increase, payoff to individuals and organizations; Supply office equipment and computerize tax administration 3.4 Conditions for implementing solutions to amend income tax in the context of Vietnam joining WTO 3.4.1 Objective conditions consistent in recruiting, training and financial incentives to improve the quality of human resources for the tax authorities * * * - Economic development situation and foreign and domestic economic context: + The domestic economic situation: Vietnam's economy has been passing through a difficult period with growing bankrupcy The majority of small private businesses can not access bank loans, state economic groups are also falling into the debt crisis + International economic situation: By the end of 2012, the world economic situation found still not much sign of positive changes after the crisis Many European economies fell into recession and eventually a common currency area in Europe return to recession again in the third quarter of 2012 - Economic condition: + Income and living conditions: The economic development taking place in stages that require the income tax admendment to suit each stage + Conditions of business culture: When tax rate adjusted higher (in terms of absolute value), the psychology of tax evasion, perjury even change his nationality or abandon the business happens Typically entrepreneurs in developing countries are often better compliant with the law 3.4.2 Subjective conditions - The execution of laws: When residents and business people are highly compliant, the amendment of income tax policy is obeyed - Habits and ways of managing of the object and subject of management: The habit of "relying on power, position and relations" in the transitional period leading to the lack of transparency and fairness in business and income tax - Human resources: Human resource management to meet the requirements of modern tax administration requires additional strategies, both quantity and quality upgrade for this team There should be clear policies, 19 20 CONCLUSION Income tax amendment is an important content It requires a huge amount of work by many agencies , from the Tax Department - Ministry of Finance and the relevant agencies of the Government and Parliament During the amendment process, it is hard to avoid the conflict of interest between the State and the taxpayers Therefore, it is needd to harmoniously handle this relationship On the other hand, since Vietnam became a WTO member , the income tax admendment need to meet principles of WTO In some cases, it is necessary to sacrify immediate benefits to ensure proper implementation of WTO commitments Situational analyses to draw conclusions about the issues that need further research to develop solutions of income tax amendment in Vietnam in the context of being WTO members are required The thesis has demonstrated the impact of income tax amendment to state revenue, on prices , supply and demand and consumption in the economy From the analysis and evaluation of the situation , the thesis summarizes the views, goals and proposes solutions of income tax amendment on the basis of WTO rules thoroughly These solutions include solutions of amended contents, methods, procedures, complementary solutions for both tax authorities and taxpayers Thank you very much./ 21 [...]... demonstrated the impact of income tax amendment to state revenue, on prices , supply and demand and consumption in the economy From the analysis and evaluation of the situation , the thesis summarizes the views, goals and proposes solutions of income tax amendment on the basis of WTO rules thoroughly These solutions include solutions of amended contents, methods, procedures, complementary solutions for both tax. ..CONCLUSION Income tax amendment is an important content It requires a huge amount of work by many agencies , from the Tax Department - Ministry of Finance and the relevant agencies of the Government and Parliament During the amendment process, it is hard to avoid the conflict of interest between the State and the taxpayers Therefore, it is needd to harmoniously handle this relationship On the other hand,... since Vietnam became a WTO member , the income tax admendment need to meet principles of WTO In some cases, it is necessary to sacrify immediate benefits to ensure proper implementation of WTO commitments Situational analyses to draw conclusions about the issues that need further research to develop solutions of income tax amendment in Vietnam in the context of being WTO members are required The thesis... solutions of income tax amendment on the basis of WTO rules thoroughly These solutions include solutions of amended contents, methods, procedures, complementary solutions for both tax authorities and taxpayers Thank you very much./ 21