HANOI, March 12 (Xinhua) -- The Vietnam Chamber of Commerce and Industry (VCCI) has proposed a zero value-added tax (VAT) rate be maintained for exported services, over worries that tax hikes would undermine the competitiveness of Vietnamese providers against foreign rivals, local newspaper Vietnam News reported Tuesday.
The recommendation was made in response to the Ministry of Finance's draft proposal on imposing VAT on most exported services, instead of the zero rate as currently.
According to the ministry, only international transportation and vehicle rental outside Vietnam and some related services are proposed to be maintained at zero tax rates, while others will be subject to VAT rate, commonly at 10 percent.
VCCI said that zero VAT on exported services played a significant role while the imposition of 10 percent VAT rate when exporting will make it difficult for Vietnamese services providers to compete with foreign rivals.
According to VCCI, most countries around the world are imposing zero VAT on exported services and allow tax refunds on inputs. Thus, VAT on exported services should be kept at zero in Vietnam. ■
