A bridge running along Belt Road No 2 in Hanoi (Photo: VNA)Hanoi (VNS/VNA) - The Ministry of Planning and Investment has asked for corporateincome tax (CIT) to be cut for small and medium-sized enterprises (SMEs) byhalf this year in an effort to boost growth when the COVID-19 pandemic eases.
The proposalwas highlighted in a draft Government Resolution about solutions to removedifficulties for businesses and accelerate the disbursement of publicinvestment.
Reducing CITfor SMEs was just a part of the efforts to lower production costs for businesses,of which a number of taxes and fees would also be cut, according to the draftresolution.
Under thedraft, the Ministry of Finance would be in charge of forming policies forexemptions or tax reductions to be submitted to the National Assembly thismonth.
The policieswill also include adjustments to deductions on personal income tax, exemptionsor reductions for environmental protection tax, and a 50 percent reduction ofregistration fees for domestically-produced cars and special consumption taxesfor the domestic automobile industry.
VAT, whichcurrently stands at 10 percent, would also be halved for pandemic-hit goods andservices and input products. VAT refunds would also be considered for sectorswhich were suffering from the pandemic such as aviation and tourism.
Otherpolicies in consideration included exemptions for agricultural land tax andincome tax for business households and individuals.
The Ministryof Finance would also be in charge of issuing circulars about cutting fees forwater resources and construction project evaluations. Other fees to be cutincluded road tolls, seaport charges, aviation service charges and roadmaintenance fees.
The Ministryof Finance estimated that the value of taxes and fees exempted or reduced wouldreach 46 trillion VND (1.98 billion USD).
This wouldbe a bold move after Government Decree No 41/2020/ND-CP promised a five-monthextension for tax and land use fees worth 180 trillion VND (7.7 billion USD).Under the draft, the postponement could be increased by up to one year.
According toPham Dinh Thi, director of the finance ministry’s Tax Policy Department, theCOVID-19 pandemic had heavily affected a number of socio-economic sectors.
The Ministryof Finance was cooperating with relevant ministries to raise policies tosupport businesses who were hit hard by the pandemic, Thi said, adding thatreducing taxes and fees would help reduce business costs.
In theshort-term, State budget revenue would fall, but in the long term, thereduction would promote the development of business and production which wouldhelp create jobs, accelerate growth and increase tax revenue, Thi stressed.
Under thedraft resolution, interest rates for new and existing loans would be cut by twopercentage points.
Loanpackages with preferential rates would also be raised for medium and largeenterprises suffering from the pandemic, especially those with more than 100workers that had seen a drop of more than 50 percent in revenue in the firsttwo quarters of this year.
Focus wouldalso be placed on developing trade and ensuring food security to contribute tocontrolling inflation.
The draftresolution also raised a number of solutions to speed up the disbursement ofpublic investment to drive growth after the pandemic.
According tothe Ministry of Finance, total public investment for this year was planned atnearly 700 trillion VND (29.9 billion USD), 2.2 times higher than the sumdisbursed in 2019./.
The proposalwas highlighted in a draft Government Resolution about solutions to removedifficulties for businesses and accelerate the disbursement of publicinvestment.
Reducing CITfor SMEs was just a part of the efforts to lower production costs for businesses,of which a number of taxes and fees would also be cut, according to the draftresolution.
Under thedraft, the Ministry of Finance would be in charge of forming policies forexemptions or tax reductions to be submitted to the National Assembly thismonth.
The policieswill also include adjustments to deductions on personal income tax, exemptionsor reductions for environmental protection tax, and a 50 percent reduction ofregistration fees for domestically-produced cars and special consumption taxesfor the domestic automobile industry.
VAT, whichcurrently stands at 10 percent, would also be halved for pandemic-hit goods andservices and input products. VAT refunds would also be considered for sectorswhich were suffering from the pandemic such as aviation and tourism.
Otherpolicies in consideration included exemptions for agricultural land tax andincome tax for business households and individuals.
The Ministryof Finance would also be in charge of issuing circulars about cutting fees forwater resources and construction project evaluations. Other fees to be cutincluded road tolls, seaport charges, aviation service charges and roadmaintenance fees.
The Ministryof Finance estimated that the value of taxes and fees exempted or reduced wouldreach 46 trillion VND (1.98 billion USD).
This wouldbe a bold move after Government Decree No 41/2020/ND-CP promised a five-monthextension for tax and land use fees worth 180 trillion VND (7.7 billion USD).Under the draft, the postponement could be increased by up to one year.
According toPham Dinh Thi, director of the finance ministry’s Tax Policy Department, theCOVID-19 pandemic had heavily affected a number of socio-economic sectors.
The Ministryof Finance was cooperating with relevant ministries to raise policies tosupport businesses who were hit hard by the pandemic, Thi said, adding thatreducing taxes and fees would help reduce business costs.
In theshort-term, State budget revenue would fall, but in the long term, thereduction would promote the development of business and production which wouldhelp create jobs, accelerate growth and increase tax revenue, Thi stressed.
Under thedraft resolution, interest rates for new and existing loans would be cut by twopercentage points.
Loanpackages with preferential rates would also be raised for medium and largeenterprises suffering from the pandemic, especially those with more than 100workers that had seen a drop of more than 50 percent in revenue in the firsttwo quarters of this year.
Focus wouldalso be placed on developing trade and ensuring food security to contribute tocontrolling inflation.
The draftresolution also raised a number of solutions to speed up the disbursement ofpublic investment to drive growth after the pandemic.
According tothe Ministry of Finance, total public investment for this year was planned atnearly 700 trillion VND (29.9 billion USD), 2.2 times higher than the sumdisbursed in 2019./.
VNA
