A Study On Vietnam’s Tax Burden

The state budget revenue means that the State uses the powers to focus a part of the national financial source forming the state budget funds to meet the spending needs. The spending needs of the State are also to perform the tasks for the country’s development, namely the issues of the economy and society. To perform the tasks, the State uses the tax burden as a most important lever to regulate economic and social issues as economic growth, industrial restructuring, FDI attraction, equitable income distribution and others. However, in practice in countries and territories around the world, the tax burden is always one of the most sensitive contents, so it always causes the interest conflicts between the State and the people, and a practical case of Vietnam is also not an exception.After the two stages of tax regime reform (1990-1995and1996-2000), Vietnam’s tax system had been formed with the application of many important taxes, but the level of their perfection was still unable to meet the practice’s demands. During the period of administrative reform of taxation (2001-2005) and so far, Vietnam has continued to amend the old tax laws and ordinances, at the same time has issued a number of new tax laws and ordinances, so the tax regime system is relatively completed. However, besides the achieved results that the tax burden has not only done to increase the state budget revenues but also has become one of the most important factors affecting the economy’s development, but the system of tax regimes and tax policies of Vietnam still existed notable weaknesses. For advantages and weaknesses, we will introduce and analyze them in this thesis through the following chapters.The thesis’s main ideas and conclusions have been shown in eight chapters. In Chapter1, we have tried to analyze the issues as context of research, domestic and foreign research, purpose of research, research significance, at the same time we also tried to introduce the research methods would be used in this thesis. In Chapter2, we have introduced and analyzed the basic contents of tax burden, main factors effecting the tax burden, tax incidence and tax burden shifting, at the same time have also introduced the theories related to the tax burden of the demand-side economics, the supply-side economics and the modem side economics. In Chapter3, we have introduced the organizational structure model of the current tax regime system in Vietnam, at the same time we have also introduced and analyzed the tax regime system before and after economic reform, tax burden structure, and constituent factors of the tax burden.In Chapter4, besides the introduction and analysis of the theoretical contents about the relationship between tax burden and equitable income distribution, we have also analyzed the impact of the burden of some taxes for equitable income distribution in Vietnam. In fact, the burden of three taxes have affected equitable income distribution to be the most obvious including personal income tax, special consumption tax and corporate income tax, but the adjustment effect of these taxes has not yet achieved the optimal objectives of fairness and efficiency. In addition, we have also compared the personal income tax between China and Vietnam, and we have discovered that the personal income tax in Vietnam was more backward than China, the personal income tax burden of Vietnam was higher than China, and the role of the personal income tax on equitable distribution of income in Vietnam was less effective than ChinaIn Chapter5, besides the introduction and analysis of the related theories, we have also analyzed the relationship between tax burden and industrial restructuring in Vietnam. The research results have shown that the tax burden has affected the industrial restructuring in Vietnam but not really clear. The evidences that many industries or sectors have enjoyed tax incentives such as agriculture, forestry and fishing, but the attraction of financial capital and high technology and engineering for them was very difficult and not achieved the original objectives.In Chapter6, we have introduced and analyzed the related theories about the relationship between tax burden and FDI attraction. Through the theoretical bases, we have analyzed the role of the tax burden in attracting FDI flows into Vietnam The results have been found in this chapter that the tax burden was one of the three most important factors influencing the attraction of FDI inflows into Vietnam, and the remaining two factors are labor costs and inflation index These findings are also consistent with the survey results of Vietnam organizations in foreign invested enterprises.In Chapter7, besides the introduction and analysis of the multiplier model and Laffer model, we have also analyzed the relationship between tax burden and economic growth in Vietnam. These results have been found that in terms of other factors as constant, the tax burden has affected economic growth in Vietnam. At the same time, we also discovered that the impact of the tax burden on economic growth in China was more effective than in Vietnam, because Vietnam’s tax burden has exceeded the endurance of the economy and higher than ChinaFinally, in Chapter8, we have concluded the contents in this thesis, and have pointed out the innovation points that are different with the results of the previous authors. Moreover, we propose the outlook contents can continue to research and development in the future.