Finance Ministry proposes 5-month extension of VAT and land rent in Vietnam
HANOI (Viet Nam/ANN) - The Ministry of Finance has submitted to the Government a five-month extension of value-added tax (VAT), personal income tax and land rent fee payments for those affected by the COVID-19 epidemic.
The extension is a key part of the Government draft decree on extension of tax payment and land rent to those affected by the epidemic, which is expected to come into effect soon to help businesses recover production and overcome difficulties, contributing to gaining the set economic growth target of 2020.
If the draft is approved by Prime Minister Nguyen Xuan Phuc, there will be three groups of beneficiaries.
The first group includes businesses, organisations, individuals, groups of individuals and households engaged in production activities in agricultural, forestry and fisheries sectors, production and processing of food, textile and garment, footwear, production of rubber products, production of electronic products and computers, and automobile manufacturing and assembling (except for cars with nine seats or fewer).
The second group covers those operating in transport sectors (railway, road, waterway, aviation, warehousing and supporting activities for transportation), accommodation and catering services, activities of travel agents, tour businesses and support services related to tour promotion and organisation.
And the third is small and super small enterprises defined by regulations of the Law on Supporting Small and Medium Enterprises.
The ministry said the total amount of the five-month extension is estimated to be about VNĐ30.1 trillion (US$1.3 billion), which is not expected to affect the State budget balance in 2020. However, the budget revenue this year will not decrease because enterprises must complete payment to the State budget before December 31, 2020.
According to recommendations of the Vietnam Association of Small and Medium Enterprises sent to the Prime Minister and the Ministry of Finance recently, the COVID-19 epidemic has directly affected many industries and production fields of Việt Nam, causing supply chain disruptions and indirectly effecting the entire economy.
A forecast by the Ministry of Planning and Investment shows that in case the epidemic is controlled in the first quarter of this year, the country's economic growth rate is forecast at 6.25 per cent, down 0.55 percentage point compared to 6.8 per cent set out in the Government's Resolution No.01/NQ-CP on January 1, 2020.
In case the epidemic is controlled in the second quarter of this year, the economic growth will reach 5.96 per cent, down 0.84 percentage point against the target.
Pham Dinh Thi, Director of the Tax Policy Department under the Ministry of Finance, said that in a short time, the ministry collaborated with other ministries and agencies to finalise the draft decree to submit it to the Government for approval and promulgation, aiming to provide assistance to those engaged in production and business activities in economic sectors directly affected by the Covid-19 epidemic.
All beneficiaries of the draft decree must send a written request for extension of tax and land rent to the tax authorities before May 31, 2020 (electronic or other methods selected by taxpayers).