Feb 18, 2021 / 15:25

Vietnam finance ministry to delay tax payment worth US$5 billion

The Hanoitimes - Such extension in delay of taxes and land rental fees payment is essential for the business community to continue its economic recovery process and ensure the realization of the 6.5% economic growth target in 2021.

The Ministry of Finance (MoF) has proposed the Government to extend the deadline for taxes and land rental fees payment worth a total of VND115 trillion (US$5 billion).

The extension, which has been implemented by the Government for months after the novel coronavirus pandemic hit the country last year, is expected to help businesses overcome difficulties and further aid economic recovery amid serious Covid-19 situation globally.

 Production of car parts and accessories at Vietnam Stanley Electric Company in Quang Minh industrial park. Photo: Danh Lam

“The pandemic is causing disruption to global supply chains, with tourism and transportation among hardest-hit sectors,” noted the MoF.

For value-added tax, to minimize the impacts of a lower tax rate to the state budget revenue in 2021, the MoF suggested a 5-month extension in the delay, which could cause a decline in VND68.8 trillion (US$2.98 billion) in budget revenue during that period.

The MoF planned to delay payment of corporate income tax (CIT) in three months with an estimated amount of VND40.5 trillion ($1.75 billion), while the amount of land rental fees subject to further deferment would reach VND4.4 trillion ($191 million). 

Regarding business households or businesspeople, the MoF said it would delay the payment worth VND1.3 trillion ($56.41 million) of value-added and income taxes this year.

According to the MoF, such extension in delay of taxes and land rental fees payment is essential for the business community to continue its recovery process and ensure the realization of the 6.5% economic growth target in 2021.

“A delay in payment would not affect the budget revenue for this year, as tax payers would still fulfill their obligation by year-end,” stated the ministry.

Since the first Covid-19 outbreak in Vietnam last March, this is MoF’s third proposal for extending payment of taxes and land rental fees to support those affected by the pandemic.

In 2020, a similar move had benefited 184,900 tax payers with nearly VND87.3 trillion (US$3.78 billion) in tax amount subject to delay.