Financial policies: "Special medicine" for businesses

The Ministry of Finance will consider, study and report to competent authorities on appropriate tax, fee and charge solutions. Photo: Thuy Linh

The results of the "special doses of medicine"

Looking back at 2020, when the Covid-19 pandemic first broke out and caused unprecedented harm to the economy, through fiscal policy, the State budget has handled budget, support for businesses and people to the tune of VND 128.33 trillion to respond to the Covid-19 pandemic, in which, exemption, reduction, tax extension, land rent, fees and charges 111, 5 trillion VND; VND 16.83 trillion for pandemic prevention and control and people support.

The above policies are not enough to be a "lifesaver" for businesses to escape difficulties caused by the pandemic, in the context of the economy not only in the country but also in the world struggling, State budget revenue has shown signs of heavy decline; this has shown the determination of the Government. If they have to tighten their belts again, they have to energise businesses and support social security for people. As a result, Vietnam's economic growth in 2020 was among the highest in the world and in the first quarter of 2021 at nearly 5% has shown the effect of this "special medicine".

The achievements in 2020 in terms of socio-economic development and State budget were very positive, but it is too early to say that to the country escaped the impact of the Covid-19 pandemic. It is early but the options for the "post-Covid-19" period have been considered. On the side of the Ministry of Finance, it has always used economic growth as a source to nurture and develop revenue. Solutions for taxes, fees and charges may cut revenue in the short-term, when production and business development get stronger, the increase in the size of the economy will increase the State budget, not only offset the decrease in revenue due to policy changes but also increase State budget revenue compared to the assigned estimate.

Coordinating to support businesses

Entering 2021, the Government continued to offer urgent solutions to remove difficulties for production and business in the context of the complex development of the Covid-19 pandemic. The difficulty is the "dual task", both preventing the pandemic and ensuring the task of socio-economic development. To do that, ministries and branches, including the Ministry of Finance, under the direction of the Government, have sought solutions to remove difficulties for firms.

That is the policy of extending tax and land rent in 2021 specified in Decree 52/2021/ND-CP with a total estimated tax and land rent extension of VND 115,000 billion. Recently, the Ministry of Finance sent an official dispatch to consult ministries and agencies on extending the time to reduce nearly 30 fees and charges in Circular No. 112/2020/TT- BTC until December 31, 2021 with a reduction in fees and charges estimated at VND 1,000 billion.

Sharing with the Ministry of Finance, economist Nguyen Minh Phong said that, in the current context, the Ministry of Finance is in a difficult position as it has to ensure the task of budget collection according to targets, while it also has solutions of tax, fee and fee support for businesses. It is very difficult to issue new policies to ensure there is no impact on reducing budget revenue.

"I know, the Ministry of Finance has proposed a number of tax reduction solutions for businesses. This may reduce budget revenue. However, the ministry has also calculated to both support businesses and ensure the task of budget collection. With the experience and success in managing the State budget - finance policy over the past time, I believe that the Ministry of Finance will implement many effective solutions to properly and fully collect the budget, complete the target on the revenue estimate for 2021," said economist Nguyen Minh Phong.

According to the Ministry of Finance, the ministry will continue to closely monitor the actual developments of the Covid-19 pandemic situation, the activities of businesses as well as the market and orientations and policies of the Party and the State to consider, study and report to authorities on appropriate solutions on taxes, fees and charges.

Along with the development and implementation of the policy solutions, the Ministry of Finance will promote the work of perfecting institutions, improving the effectiveness and efficiency of the apparatus, reforming administrative procedures and promoting comprehensive modernisation of all fields of the financial sector, especially in the fields of taxation and customs, which are considered fields that are closely related and directly related to enterprises, contributing to creating a favourable and healthy business investment environment, creating conditions for businesses to operate stably.