Deputies debate 30% tax exemption for SMEs

Workers at a wood workshop in northern Bac Ninh province

While deputies agreed the policy was needed to support SMEs, and by extension workers employed by them, some have voiced concerns over the direction of the Government's tax exemption policies.

Deputy Nguyen Van Than from northern Thai Binh province and chairman of the Vietnam Small and Medium Enterprises Association said it should include medium-sized, not just small and micro-sized businesses.

Vietnam has over 760,000 businesses, of which small-sized businesses account for 93% and medium-sized 4%. Together, they employ a large number of workers and actively contribute to socio-economic development and social security.

"The proposed policy stipulated small-sized businesses with annual sales under VND50 billion (US$2.2 million) are eligible for tax exemption. Meanwhile, the official definition for small-sized businesses are those with income under VND100 billion and employ less than 50 workers. As it stands, only around half the number of small-sized businesses could qualify under the policy," said Than.

In addition, he said a 30% tax exemption for businesses for the year 2020 won't be much help compared to tax exemption for the year 2019.

"Most businesses likely will struggle this year. It would be a miracle for some of them to survive, let alone making a profit. It's my opinion that a tax exemption for 2019 would be much more relevant and helpful to businesses," he said.

Deputy Phung Van Hung from northern Cao Bang province showed support for a policy that includes medium-sized businesses.

"Should businesses make no or very little profit for the year 2020, the tax exemption amount won't account for much," he said.

Deputy Nguyen Hoang Mai from southern Tien Giang province urged the Government to reconsider and include businesses that employ more than 100 workers, saying during this difficult time, it's important to encourage businesses to keep workers on payroll.

Deputy Vu Tien Loc, chairman of the Vietnam Chamber of Commerce and Industry, said the Government's tax exemption policy was designed to support workers and it's important that its implementation would cover as many workers as possible.

Aside from the size of businesses, Loc said the Government must also focus on helping businesses at the core of the economy for their importance to economic security and sustainable development such as airlines and tourism.

Minister of Finance Dinh Tien Dung said along with tax exemption other measures were being implemented to support businesses, saying the Government had reduced, and in some instances removed, numerous expenses for businesses such as land use and some 18 other administrative fees.

Meanwhile, businesses owners might still apply for other forms of tax reduction including income tax and qualified dependents as stipulated in a decision by the NA's Standing Committee.

Dung said his ministry was working on a plan to cut by half the car registration fee to encourage domestic car production and to reduce environment fees for the airline industry.