Many experts have backed the Ministry of Finance's controversial proposal to levy taxes on corporate deposit interest.

Economists recommend levying taxs on interest

In an act to amend the corporate income tax law, the ministry has expanded the list of taxable income. According to the proposal, the government will levy tax on the deposit interest and even the lending interest of corporations.

The proposal has been met with strong opposition from enterprises. The owner of one company said, "The Ministry of Finance should reconsider their decision because a lot of that interest goes to pay wages and bonuses for employees."

Meanwhile, several experts said it is reasonable to levy tax on interest.

Economist Nguyen Minh Phong said that the proposal might even prevent corporations from delaying paying salaries, taxes or investments to upgrade member companies to make profits from bank saving accounts.

Nguyen Tri Hieu, who has worked for 30 years in the banking sector also agreed. "Many other countries in the world also levy taxes on corporate deposit interest. For example, the USA levies a 25-30% tax on deposit interest or currency trading. This is also a way to improve our current state budget deficit."

On early 2013, Le Hoang Quan, Chairman of HCM City Real Estate Association,  proposed imposing taxes on saving accounts of over VND500 million (USD24,038). His proposal was strongly criticised by the public and not accepted.