TAXATION

Associate Professor., Ph.D.

Nguyen Thi Thanh Hoai

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 Subject Addressed
1. An overview on tax

2. Value Added Tax (VAT)

3. Excise duty

4. Customs duty

5. Corporation Income Tax (CIT)

6. Personal income tax (PIT)

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 REFERENCES
1. Taxation – A University Textbook, Finance Publisher,
2013 - Le Xuan Truong and Nguyen Thi Thanh Hoai
2. Websites:
 www.mof.gov.vn
 www.gdt.gov.vn

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 CHAPTER 1

AN OVERVIEW ON TAXATION

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 contents
1.1. Definition of tax
1.2. Characteristics of tax
1.3. Roles of tax
1.4. Kinds of taxes
1.5. Standards of a modern tax system
1.6. Basic elements of a tax law
1.7. Principles of taxation

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 1.1. Definition

Read over all of the perceptions of tax in the

text book and answer the following questions:
 Who pay taxes?
 To whom taxes are paid?
 What are taxes used for?
 Is it compulsory or voluntary?
 What are the forms of taxes?
 Where does it come from?

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 1.1. Definition

Tax is a part of income which is legally stipulated and

compulsorily paid by citizens to the government in
order to finance the public expenditures.

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 1.2. characteristics
1) A compulsory payment
 What does a compulsory payment mean?
 Why does it need to be compulsory?
 From this feature, point out the differences
between tax and other revenues of the state.
2) An indirect compensation payment
 Why isn't it a direct compensation payment?
 Point out the signs of indirect compensation.

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 1.3. Roles of taxes
1) An important revenue of the state budget
 Why is it an important revenue of the state
budget
 Names of countries where tax isn't an
important revenue of the state budget.
2) Macro economic adjustment
 To contribute to regulate economic cycle
- State 4 stages of economic cycle
- Name some worst recessions in history
- Point out the way that tax help to regulate
economic cycle

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 1.3. Roles of taxes (continued)
 To contribute to balance the labor market and
control inflation
- Describe the way that taxes can help to
balance the labor market and control inflation
- Why is it said that using tax to balance the
labor market and control inflation is a two-
edge sword?

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 1.3. Roles of taxes (continued)
 To stimulate the economy to develop in
accordance with government’s directions
- Which elements of a tax is often used to
stimulate the economy to develop in
accordance with government’s directions
- Where and when should the tax rate be high?
Give example.
- Where and when should the tax rate be low?
Give example.
- Where and when should incentives are used?
- State some kinds of incentives in Vietnam’s
tax law.
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 1.3. Roles of taxes (continued)
 Domestic production protection
- Describe the way that tax can help to protect
the domestic production
- State the advantages and disadvantages of
protectionism
- Give some examples to demonstrate the use
of tax to protecting the domestic production in
Vietnam in recent years
- How does this role change in the context of
global integration

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 1.3. Roles of taxes (continued)
 To correct problems caused by negative
externalities
- Give some examples of positive externalities
of production
- Give some examples of negative externalities
of production
- What is market failure?
- Describe the way that tax can help to correct
market failure
- How does environment tax affect the
producers who pollute the air, rivers, lakes
and oceans?
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- Can only tax help to protect the environment?
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 1.3. Roles of taxes (continued)
3) To contribute to reducing inequity in income
distribution
- What is equity? Give some examples of
inequity.
- How taxes can help to reducing inequity in
income distribution?

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 1.4. Tax classification
1) Based on the way to levy
- Give some examples of direct tax
- Give some examples of indirect tax
- Which tax, direct or indirect one, is easier to
collect?
- Which one is more equitable?
2) Based on bases of taxes
- Give some examples of consumption tax
- Give some examples of property tax
- Give some examples of income tax
- Which of the above three kinds of tax is
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unfair?
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 1.4.Tax classification

3) Based on the proportion between tax and

income
- Which tax, progressive or regressive, takes
more from the rich? Which takes more from
the poor?
- Why is VAT a regressive tax? Give an example
to demonstrate.
- Why is VAT still applicable despite of its
regressiveness?
- Is it right that a progressive tax is always a
good tax in term of equity?
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 1.4.Tax classification
4) Based on the power to levy
- Where doesn’t federal tax and local tax exist?
- Where does federal tax and local tax exist?
- Point out some countries where federal tax
and local tax exist?
- In an autonomy system, can a local authority
decide any tax they like and any tax rate they
like?

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 1.5. standards of a Modern tax system

1) Equity
- What is horizontal equity?
- Point out the problems of horizontal equity
standard
- What is vertical equity?
- How to measure the ability to pay?
2) Efficiency
- There are two aspects of efficiency. What are
they?
- What does “efficiency in tax administration”
mean?
-
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What does
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21 May 2019
impact” mean?
 1.5. standards of a Modern tax system (continued)

3) Stability
- Why should a tax system be stable?
- What should a government do in enacting a
tax law to get this standard?
4) Adaptability
- Why should a tax system be adaptable?
- What should a government do in enacting a
tax law to get this standard?

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 1.5. standards of a Modern tax system (continued)

5) Transparency
- What does transparency mean?
- Why should a tax system be transparent?
- What should a government do in enacting a
tax law to get this standard?

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 1.6. Basic Elements of a tax law
1) Name of a tax
2) Taxpayer
- Compare to meanings of taxpayer
3) Tax base
- How many types of tax base?
- Discuss the importance of tax base.
3) Tax rate
- What is tax rate?
- Describe all types of tax rate. Give example
for each.
- Discuss the advantages and disadvantages of
each type of tax rate
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 Chart of tax rates

Forms Ways of taxation

Specifi Single
c rate specific
rate
Tax Proportion
rate al rate Simple progressive
tax table

Ad Progressiv
e rate Marginal progressive
valore
tax table
m rate
Regressiv Wholly progressive
e rate rate table
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 1.6. Basic Elements of a tax law
5) Incentives
- Read over the course book and describe all
types of incentives
6) Procedure
- What are the contents of procedure?
- Describe two ways of representing this
element.
7) Punishment
- Why is punishment used in a tax law? What
would happen if there were no punishment
articles in a tax law?
- Describe
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types of violations of tax law.
Hoài
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- Describe types of punishment.
 1.7.The principles of taxation
1) Benefit-received principle
- What is the root of this principle?
- What does this principle mean?
- In what circumstances can we apply this
principle? In what not?
2) Ability-to-pay principle
- What is the root of this principle?
- What does this principle mean?

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 1.7.The principles of taxation (continued)
3) Origin Principle
- What is the root of this principle?
- What does this principle mean?
4) Destination Principle
- What is the root of this principle?
- What does this principle mean?
- Give example of this principle in reality.

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 THE VIETNAM’S tax SYSTEM
 Value added tax;
 Excise duty;
 Customs duty;
 Environmental protection tax;
 Corporate income tax;
 Personal income tax;
 Agricultural land use tax;
 Non-agricultural land use tax;
 Natural resources tax.

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