TAX CUTS PROPOSED TO SUPPORT BUSINESSES ROCKED BY PANDEMIC

The Tax Policy Department under the Ministry of Finance is drafting a proposal on tax reduction to support individuals and businesses affected by the COVID-19.

Specifically, there could be four different measures for tax reduction and exemption on late payment interest for businesses and individuals.

(i) Reducing 30 per cent of corporate income tax (CIT) payable in 2021 for enterprises and organisations as applied in 2020;

(ii) Reducing 50 per cent of payable tax amount arising from production and business activities in the third and fourth quarters of 2021 for vulnerable business households and individuals doing business in all industries;

(iii) Reducing 30 per cent of value-added tax for enterprises and organisations operating in a number of service sectors;

(iv) Exemption of late payment interest arising in 2020 and 2021 for enterprises and organisations incurring continuous losses in 2018, 2019, and 2020.

It is estimated that the implementation of solutions proposed can reduce budgetary revenue by about VND20 trillion ($869.57 million).

In addition, the MoF is also studying and reporting to the prime minister several solutions to reduce land rents for 2021.

"The reduction of taxes, land rent, and late payment interest will put pressure on the state budget, but in the long term, it will have a great impact on the whole society, demonstrating the government's companionship to support vulnerable businesses," a representative from the MoF said.

Source: VIR