Tax deadline should be delayed for businesses, said MoF
Businesses may have several additional months before they have to pay income tax and land use fees, said a proposal by the Ministry of Finance (MoF) to the Government.
The ministry purposed a five-months extension for business VAT tax, a three-month extension for income tax (for certain businesses only) and land use fees, which may result in over US$5 billion reductions in the State's budget collection during the first half of 2021.
The proposal also included household and private businesses in sectors that were eligible for support as well as their income tax.
MoF said the State's budget would still even out as taxpayers were expected to make full payments by the end of the fiscal year while citing numerous difficulties faced by the business community in dealing with adverse effects of the COVID-19 pandemic as gound for the proposal.
The ministry stressed the importance of allowing businesses to hold on to their cash as it's essential to the country's economic recovery as a whole. This is the third proposal made by the ministry in support of the business sector.
Last year, tax offices issued extensions for nearly 185,000 businesses with a total tax payable of $3.8 billion with the main benefits being 14 domestic car manufactures with an amount of $870 million.
Economist Dinh Trong Thinh said the Government must do more to support the business community, saying it is an important factor in maintaining social and economic security. Thinh, however, added inspection and oversight over support policies must be thorough to prevent waste and corruption during the implementation phase.
Head of the General Department of Taxation Cao Anh Tuan said reviews had been conducted by his department to gauge the damage caused by the pandemic to the business sector, local tax offices have been instructed to submit reports on if and how the pandemic has affected businesses under their jurisdiction.
The department also established online channels to answer tax-related questions, carried out administrative reforms and simplified the inspection process to support businesses.