July 07, 2020 08:51

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Supportive policies on taxes are timely "lifebuoy"

10:02 | 28/05/2020

VCN –Talking with Customs Newspaper, Mr. To Hoai Nam, Vice President and General Secretary of the Vietnam Association of Small and Medium Enterprises, said supportive policies have touched upon what enterprises really need in the current context.


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supportive policies on taxes are timely lifebuoy

To help enterprises surmount difficulties at present, the Government and the Ministry of Finance have issued many policies on taxes, fees and charges. What does it mean, especially for small and micro enterprises?

In 2020, there was an unexpected and objective "incident" to the economy, which is the Covid-19 pandemic. Although Vietnam has had agood response to the crisis, and the domestic market has returned to normal, its impact isremarkable.

In fact, all enterprises are affected by the pandemic. Therefore, the Government has offered a series of supportive policies, especially on taxes, fees and charges, which are of great significance for reviving the business and production situation of enterprises. This is especially significant for small and micro enterprises because this group has a common feature of low capital flow and insignificant accumulation, they are easily affected when facing difficulties. Just a few months of difficulties can push them to risk stopping operations or bankruptcy.

In my opinion, the issued supportive policies aresynchronous and unified from production and business. All will be a timely "lifebuoy" to enterprises during difficulties.

In the long term, the Ministry of Finance is proposing to the Government for submission to the National Assembly on reducing the CIT rate for small and micro enterprises to 15-17% for businesses which have more resources to reinvest in production and business, and at the same time export and exempting income taxes for business households converted into enterprises. How do you evaluate these proposals?

I highly appreciate the Ministry of Finance's proposalson reducing taxes for small and micro enterprises. Because the disease causes difficulties for enterprises, in 2020, the state budget revenue will be significantly affected.

Moreover, the Government, as well as the Ministry of Finance, have also provided support for enterprises through various policies. Although the number of enterprises benefiting from tax reduction is not high, in terms of policies and political will, the State has paid attention and incentives, especially for small and micro enterprises.

For business households, they have more advantages than the enterprise model: paying compliance cost with the law on corporate governance much lower than other enterprise models. The business household owner has full authority to decide its management structure and business activities, while the enterprise must follow the model of corporate governance, management and decision-making process. In addition, the business household is not an accounting unit as prescribed by the Accounting Law, so they are not required to organize the accounting apparatus and to prepare and submit financial statements.

Therefore, the encouragement of small business households to transform into enterprises with reasonable policies is in line with the inevitable trend and the objective of one million enterprises nationwide. Each supportive policy will be a motivation for business households to "transform" and overcome initial obstacles for development. The contents of the Draft Resolution have touched upon what enterprises and business households need.

I know that there are also many policies to support business households in transformation, such as exemption of license fees for the first three years, exemption of evaluation fees and first-time business license fees for conditional business lines. Therefore, this new proposal will be an important "push" to promote business households.

The policy to promote the development of the private sector, especially small and micro enterprises, has been mentioned many times by the Party, Government and National Assembly. To do this policy, what do the authorities need to pay attention to besides the preferential and supportive policies, sir?

The biggest concern of business households upon transformation into enterprises as well as of enterprises in their operation process is administrative procedures. Therefore, besides tax exemption, I think that it is necessary to simplify administrative procedures in fulfilling tax obligations. Recently, the Finance sector in general and the Taxation agency in particular have made great efforts to complete this task well. Hopefully, it will be done better in the near future to provide maximum support to the development of enterprises.

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At the same time, it is necessary to closely examine and control the compliance with tax obligations of enterprises to ensure fairness, transparency and avoid profiteering in tax collection. These solutions must be consistent to create a strong push to help enterprises to grow strongly.

Thank you,

Mr. Dau Anh Tuan, Head of Legal Department, Vietnam Chamber of Commerce and Industry:

The adjustment of corporate income tax in the direction of reducing the general tax rate is consistent with international trends and practices. Many developed countries in the world and around the region have applied specific tax rates for each enterprise model and size.

Accordingly, small and micro enterprises often enjoy preferential income tax policies, contributing to encouraging and motivating enterprises to further invest in business and production.

However, the authorities need to be careful upon implementation, because there isa risk of many businesses profiting from this policy by deliberately maintaining a small or micro scale, contrary to the actual situation of the enterprise.

Mr. Nguyen Duc Dinh, Director of Central Consulting Company:

Tax is an area closely linked to the life of enterprises. Compared to other taxes such as value added tax, export tax, import tax or natural resource tax, the corporate income tax usually does not encounter problems and few enterprises have complained if it does not relate to the size and model of enterprises.

The policy of reducing corporate income tax for small and micro enterprises is appreciated, because it can help enterprises balance their investment, production and business plans and also contribute to improving the competition for enterprises' products if the reduced tax is directly deducted from production costs.

Ms. Nguyen Kim Anh, Kim Spa Owner (Nguyen Huu Huan, Hanoi):

Previously, I did not intend to convert from an existing individual business household into an enterprise, despites advice from Hoan Kiem district tax officers on advantages.

Currently, our business is quite stable, with steady income and the number of employees is between15-20 people. However, after receiving information about CIT exemption and reduction policies for micro enterprises, especially individual business households changing business models, I have serious thoughts on this issue because that policy is quite attractive.

With the annual tax rate maintained at VND50-70 million, I am not afraid of the CIT payable at the time of conversion. Moreover, the regulations on accounting regimes and declarations for microenterprises are quite simple, which is the most attractive criteria that makes enterprises like me want to change the model. With the current socio-economic development, if the individual business household model maintains, business households cannot go farther on the path of starting a business, especially at this time when the State has created many favorable conditions for enterprises. Therefore, as soon as the income tax reduction policy for small and micro enterprises is issued, I will carry out the procedures to transform into an enterprise.

Thuy Linh (recorded)



By Thuy Linh / Huyen Trang