MANY PROPOSALS MADE TO SUPPORT PANDEMIC-HIT ENTERPRISES AND PEOPLE

The People's Committee of Ho Chi Minh City has just submitted a document to the Prime Minister and Minister of Finance proposing a number of solutions to support businesses and people affected by the COVID-19 pandemic.

Proposal for tax exemption and reduction

Vice Chairman of the Ho Chi Minh City People's Committee Phan Thi Thang said that it is necessary to reduce the payment of corporate income tax by 50% in 2021 and by 30% in 2022 and 2023 for enterprises with annual revenue of less than VND200 billion.

In addition, it was proposed to provide exemptions on personal income tax, value added tax (VAT), special consumption tax, natural resource tax, and environmental protection tax arising from production and business activities of household businesses and individuals in the third and fourth quarters of 2021 and the entirety of 2022 and 2023.

Financial support given to employees for the prevention and control of the pandemic and for the implementation of “three-on-the-spot” production model should not be treated as personal income.

Regarding the extension of the tax payment deadline, it is recommended to extend the deadline until the end of the second quarter of 2022 while no fines will be imposed for late tax declaration in 2021 due to the impact of social distancing.

Moreover, it was proposed to reduce land rent by 50% in 2021 for all enterprises while enterprises in tourism and tourism-related industries should be 100% exempted from land rent in 2021.

In the field of import and export tax collection, it is recommended to allow three-month delay in the payment of VAT on raw materials and imported goods and three-month delay in the payment of import tax on raw materials for producing exported goods.

Ho Chi Minh City also suggested that no sanctions be imposed on the late implementation of customs procedures arising during the social distancing period and due to the pandemic-related reasons.

In addition, inspection of tax law observance and specialised inspection of goods will be suspended until the end of 2022 to create conditions for enterprises to focus on restoring production and business activities.

Reducing interest rates, simplifying customs procedures

The Ho Chi Minh City People's Committee also proposed the Prime Minister and the Minister of Finance direct the State Bank of Vietnam to reduce lending interest rates for businesses with a lending interest rate no higher than 2% compared to the deposit interest rate.

In addition, the State Bank should devise preferential policies to provide loans for refinancing and working capital and to guarantee the payment of raw material purchase contracts with 0% interest rate for businesses facing difficulties due to the pandemic.

At the same time, it is crucial to simplify credit support and preferential loan procedures and extend debt payment schedules.

Regarding customs procedures, Vice Chairman of the Ho Chi Minh City People's Committee Phan Thi Thang said that it is necessary to continue to apply a specific mechanism in receiving and clearing goods serving the prevention and control of the pandemic.

The city official also recommended the handling of congestion of goods at Cat Lai Port in Thu Duc City during the outbreaks of the pandemic in Ho Chi Minh City, Binh Duong and Dong Nai.

There should be a tax grace period of 30 days, excluding a late payment rate of 0.03% per day from the date of customs clearance, to support enterprises importing goods and materials for domestic production.

Moreover, the results of specialised inspection of goods should be announced through the National Single Window (NSW) and all specialised inspection agencies must urgently register the job through the NSW to facilitate enterprises.

Source: VCCI