In 2010, after two decades of rapideconomic growth, Vietnam passed the threshold to become alower-middle-income economy. Sustained market-orientedreforms combined with intensive efforts to integrate intothe world economy are among the key drivers of thisachievement. The reform of tax policy and administration hasbeen a vital part of this transition. This is leading to afundamental change in the composition of taxpayers, fromlarge state-owned enterprises (SOEs) and foreign-investedcompanies to a myriad of small and medium privateenterprises. Economic transition is also leading to anequally important change in the sources of governmentrevenue, away from cross-border trade-related taxes andrevenue collection from crude oil toward a greater share ofdomestic tax revenue, in particular taxation of businessprofits, labor income, and capital gains on land. However,completing the transition to a market economy will requirechanges going beyond tax collection and administrationprocedures, and will involve changes to the tax instrumentsthemselves. At the end of this process, Vietnam should havea set of taxes that is simple and transparent, secures astable flow of revenues for the government, encourages anefficient allocation of resources, and does not riskconstituting a source of inequality or unfairness. Thepurpose of the series of studies in this volume is to shedlight on the issues Vietnam will be facing in the process ofreforming its tax policy and administration. The studies arealso expected to lead to concrete policy recommendationscontributing to the preparation of key policies andlegislative documents to ensure the achievement of the statebudget revenue target and other tax administration reformtargets in the SEDP 2011-2015. It is expected that theindividual studies in this series will become useful inputsinto the debate surrounding the issuance of new laws andregulations. It is also hoped that the volume will supportthe reform momentum in the tax policy area, leading toincreased efficiency, transparency, and equity.