Workers at a textile factory in HCM City. (Photo: VNA)Hanoi (VNS/VNA) - The Government's 30 percent corporate income tax cut wasa step in the right direction but it could have been more inclusive by offeringsupport to small businesses that were in desperate need of cash dueto the difficulties caused by the COVID-19 pandemic, said business leaders andindustry experts.
The tax cut,signed into effect on September 25 for businesses with revenue under 200billion VND (8.8 million USD) in the 2020 financial year, has been widelywelcomed by the business community.
In a recentsurvey conducted by HCM City's Business Association, 84 percent of the city'sbusinesses said they had experienced difficulties due to falling market demand,disrupted supply or lack of cash.
Do Phuoc Tong,Chairman of Duy Khanh Engineering Co. Ltd, said the tax cut had offeredhuge relief to small-and-medium-sized enterprises (SMEs), including thosein the electrical and electronics industries.
Despite notbeing hit as hard by the pandemic as the tourism and service industries, Tongsaid his firm was hit by a sharp fall in demand in the domestic market, and adisrupted supply chain that resulted in numerous orders being cancelled. By hisestimation, the industry suffered a 10-20 percent income decline in thefirst nine months of the year compared to the same period last year.
"Alarge number of businesses are having difficulty maintaining cashflow. Thetax cut will be a tremendous help in keeping their operations alive andfor paying workers," he said.
Pham Van Viet,Vice Chairman of HCM City's Textile and Garment-Embroidery Association, saidthe tax cut should apply to all businesses. The association also called for areduction in value-added tax from 10 percent to 5 percent in a bid to supportbusinesses across the country.
Viet cited asharp fall in demand for Vietnamese textile products in traditionally largemarkets such as the EU and the US, with the number of orders reduced by half inthe last quarter of 2020. Even the price for protective equipment and maskshad seen a sharp dive as global supply had been steadily on the rise.
For thetourism industry, however, the tax cut didn't offer much as most businesseshad been without income since March this year, according to Tran Doan TheDuy, CEO of Vietravel, one of the country's largest tour operators.
"Thereis no income this year so the tax cut was not of much help. What we really needis the Government to give us more time to pay taxes and land use fees,"said Duy. "For example, extending the deadline until June next yearinstead of by the end of this year. We could really use the cash to keep ourbusinesses running."/.
VNA
