Adjustments drawn up for tax support for enterprises
Adjustments drawn up for tax support for enterprises
The Vietnamese government is expeditiously offering the business community assistance in the form of tax relief schemes and other payment extensions.
The Ministry of Finance (MoF) is completing a draft decree on extending the time for paying VAT, corporate income tax (CIT), personal income tax, and land rental this year for enterprises and individuals.
Under the draft, the MoF suggested a 6-month extension of VAT paid during January-May and Q1, and a 5-month similar incentive in June and Q2. The total VAT extended sum from June 1, Q1 and Q2 is estimated to be around $2.8 billion.
The ministry also proposed that payment of CIT would be extended for the temporarily-paid sum for Q1 and Q2 of the tax calculation period in 2023. Specifically, the time for payment extension will be three months as from the date ending the CIT payment time under the tax management law. It is estimated that the value of the payment extension will be around VND42.8-43.6 trillion ($1.86-nearly $1.9 billion).
The MoF, in addition, has submitted to the prime minister for promulgating a decision on a 30 per cent reduction of land and water surface rentals in 2023, as the government did last year.
“We will have to continue supporting enterprises and people with more schemes,” said Prime Minister Pham Minh Chinh at last week’s cabinet meeting on the country’s 2023 economic situation thus far. “Many businesses are still bogged down in difficulties and need much support, which must be implemented as soon as possible.”
Last month, the government asked the State Bank of Vietnam (SBV) to soon submit to it for promulgation of a new decree on amending and supplementing 2022 legislation on the 2 per cent lending rate support from the state budget for enterprises, cooperatives, and household businesses via commercial banks.
At the start of 2022, the National Assembly allowed the use of a maximum of VND40 trillion ($1.74 billion) for this 2 per cent lending rate assistance package. However, the SBV reported that by late last year, disbursement from this initiative remained at a very slow pace, standing at only over VND134 billion ($5.83 million), or around 0.3 per cent of the total.
The government has also ordered that all related regulations must be regularly reviewed. “New measures must be created to help businesses out of difficulties caused by a reduction in markets, contracts, and orders,” stated Resolution No.10/NQ-CP released last month. “In the meantime, available solutions must be implemented immediately, and new measures must be advanced in order to continue assisting a number of important sectors such as logistics, aviation, tourism, textiles and garments, footwear, and wood production and processing.”
According to the General Statistics Office, last year, the number of businesses with halted operations hit 73,800, up 34.3 per cent on-year. In addition, the number of those with halted operations and waiting for dissolution reached 50,800, up 5.5 per cent; while the number of those having completing dissolution procedures sat at 18,600, up 11.2 per cent. On average, each month witnessed almost 12,000 enterprises withdrawing from the market.
In the first two months of this year, the number of enterprises whose performance was halted reached 3,800, up 9.7 per cent on-year. What is more, the number of businesses with halted operations and awaiting dissolution hit about 2.640, up 37.5 per cent; while the number of those having completing dissolution procedures stood at 1,170, down 5.4 per cent.
