Government considers reducing several taxes and fees

Most enterprises are expecting the support package of the Government to be valid soon.

Regarding reduction of production and business costs, eliminating difficulties for enterprises, ministries and sectors have been assigned specific tasks.

The Ministry of Finance reported to the Government for commenting and submitting to the National Assembly Standing Committee and the National Assembly in April 2020 on adjusting rate of deduction for family circumstances of personal income tax; exemption and the reduction of environmental protection tax of input fuels of the transport industry, especially research for further reduction of E5RON92 biofuel to encourage the use of biofuel.

The idea of ​​reducing environmental protection tax for petrol was once stated by the Ministry of Industry and Trade in a report submitted to the Government in early April. Currently, the environmental protection tax is VND 3,800 per litre for E5 RON92 and VND 4,000 for RON95. This authority also proposed that instead of mechanical taxation, the environmental protection tax for E5 RON92 petrol should be based on the level of emissions (75 - 80%) of taxes for mineral gasoline.

The Vietnam State Bank will exempt or reduce interest rates and expenses for new loans and existing loans of enterprises about 2%, especially loans generates before the outbreak of the pandemic.

The draft also introduces policies such as halving the registration fees when registering cars manufactured or assembled domestically by the end of 2020 to stimulate domestic consumption; preferential policies in terms of special consumption tax for domestic cars; reducing 50% of enterprise income tax for SMEs in 2020 to support and develop small and micro enterprises; exempting and reducing 50% of the VAT rate (currently 10%) for goods and services facing difficulties, goods and raw materials to reduce input costs for production.

Besides that, the Ministry of Finance needs to study and report to the Government to adjust time of extension for payment of enterprise income in 2019, VAT, personal income tax, land rent up to one year (according to Decree No. 41/2020 / ND-CP is five months); supplementing regulations on deferring or postponing tax payment of business households having production and business activities affected by the Covid-19 pandemic like enterprises.

The Ministry of Finance reported to the Government on allowing late payment of a part of export duty for about five months (until the end of the second quarter of 2020) to facilitate enterprises to have more supplementary sources for working capital to boost export. Review import and export tariffs issued by the Government to adjust tariff rates for several sectors such as import duty of fuel in aviation.

The Vietnam State Bank is assigned to coordinate with the units to exempt or reduce interest rates and expenses for new loans and existing loans of enterprises about 2%, especially loans generates before the outbreak of the pandemic to remove difficulties for businesses in repaying loans due to the sharp decrease in revenue.

Providing preferential loans for interest rates to medium and large-sized enterprises suffering heavy losses due to the Covid-19 pandemic (turnover in the first and second quarters of 2020 decreased by more than 50%, the number of employees paying social insurance is over 100 employees, high budget payment), loan term is from six to nine months through commercial banks; small and micro enterprises will have loan terms of three to six months via Vietnam Bank for Social Policies, small and medium enterprise development funds.

The draft also introduces policies such as halving the registration fee when registering cars manufactured or assembled domestically by the end of 2020 to stimulate domestic consumption; preferential policies in terms of special consumption tax for domestic cars

The Ministry of Transport and Transport reported to the Government to apply a policy of reducing 50% of takeoff and landing prices for aircraft and the price of air traffic control services for domestic flights; apply a minimum price of 0 VND for aviation services on the list of price range stipulated by the State during the Covid-19 pandemic, to facilitate enterprises providing services (ACV, VDO and other aviation service providers) to offer discounts to airlines and service providers.

The Ministry of Information and Communications has a solution to cut internet connection rental fees during the pandemic and provide free rental cost of internet connection and connection software for online activities, especially for teaching activities.

The draft proposed solutions to promote disbursement of social investment capital, especially public investment; development of import and export and trade and food security to contribute to curbing the price index.

This draft has been commented by ministries, sectors and localities and sent to the Ministry of Planning and Investment before April 15, 2020. These solutions, after the Government approves them, will be submitted to the National Assembly Standing Committee and the National Assembly.