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Aug 06, 2021 / 17:35

Vietnam Gov’t approves proposal on tax cuts for businesses

The support program is set to take effect in 2021.

The Vietnamese Government has approved a proposal from the Ministry of Finance (MoF) to cut and waive taxes for businesses and people affected by the pandemic.

 Tax payment at Hanoi Taxation Department. Photo: Huong Thuy

Under the plan, the MoF suggested a 30% cut in corporate income tax (CIT) for enterprises with yearly revenue of less than VND200 billion (US$8.7 million), 50% reduction in tax payment for business households and individuals in the third and fourth quarters, along with 30% in value-added tax (VAT) for those operating in certain services sectors.

Enterprises suffering consecutive losses in the three-year period from 2018-2020 will see their penalties for tax arrears in the 2020-2021 period written off, it noted.

The Government Office requested the MoF to assess the impacts of the CIT rate cut for the State budget, while expected that it would be far-reaching so that more enterprises would benefit from the VAT cut.

For the time being, the new policy is set to kick off right in 2021.

Prime Minister Pham Minh Chinh set the deadline of August 10 for the MoF to seek opinions from other ministries and send the final proposal to the Government before August 10, which would be later submitted to the National Assembly’s Standing Committee for review.

The MoF is tasked with considering further support programs for the people and enterprises amid the Covid-19 pandemic.

The finance ministry previously estimated such new support programs would cause a drop of VND20 trillion ($870 million) in State budget revenue.

Since early 2021, the MoF has issued measures to support enterprises and people worth VND138 trillion ($6 billion), of which the amount in taxes and fees cut totals VND118 trillion ($5.13 billion).