Financial mechanisms and policies are the motivation to realize a “dual goal” in 2020

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The timely financial policies have become an important driving force for enterprises to restore production. Photo: La Diu

Proactively offer support solutions

In order to support businesses and help people cope with the Covid-19 pandemic, and at the same time continue implementing the objectives and tasks of socio-economic development and the state budget in 2020, the Ministry of Finance has to build and synchronously implement many solutions and proposals on tax, charges and fee policies to remove difficulties, boost production and business, and restart the economy. Most of the policies are to simplify procedures to be applied in time.

The Ministry of Finance has been closely monitoring the actual situation, learning international experiences (in countries affected by the Covid-19 pandemic) as well as recommendations from international organizations (WB, IMF) and reviewing the ability of the budget to submit to the Government for promulgatingDecree No. 41/2020/ND-CP of April 8, 2020 on extending the deadline for paying tax (value added tax, personal income tax for business households, corporate income tax) and land rent for most people who are in difficulties due to the impact of the disease.

The Ministry of Finance has also directed the General Department of Taxation to guide the local tax departments on the implementation of Decree No. 41 to ensure uniformity and favorable conditions for taxpayers. So far, the Tax agencies have received over 133,000 requests for extension of tax and land rent with the amount of tax and land rent extended is nearly VND37.1 trillion. It is expected that the number of proposed extensions and the amount of tax and land rental will be extended in the future.

The Ministry of Finance has also submitted to the Government for reporting to the National Assembly at the 9th session of the 14th term, on the approval of a 30% reduction of business income tax for small-sized enterprises (the expected tax revenue reduction is about VND15,840 billion per year). Along with that, the Ministry of Finance has proactively submitted to the Government the exemption of license fees for many subjects such as households, individuals and newly established groups of individuals in the first year; individuals, groups of individuals, households and production and business activities with annual revenue of VND100 million or less; promptly exempt import taxes on production materials and a number of goods in service of epidemic prevention; 50% reduction of registration fee for domestic manufactured and assembled cars until the end of December 31, 2020.

Ensure the institutional building plan

In the first six months, following the set goals, the Ministry of Finance submitted to the Government to submit to the National Assembly for approval three Resolutions at the 9th session, including the Resolution on exemption of agricultural land use tax; Resolution on a number of specific financial and budget mechanisms and policies for Hanoi; Resolution on reduction of corporate income tax payable in 2020 for enterprises, cooperatives, non-business units and other organizations; submitted to the National Assembly Standing Committee for consideration five resolutions, of which two important resolutions have been passed; submitted to the Government for promulgating 12 Decrees and submitted to the Prime Minister for promulgatingtwo Decisions.

Besides, the Ministry of Finance has also regularly reviewed and systematized the list of legal documents; updated information on newly issued documents and posted them fully and promptly on the Ministry's Web Portal and National Database; intensified the propagation and dissemination of new legal documents and policies; tax law consultancy and support for businesses and people.

A number of important policies, which have a great impact on production and business activities, have been implemented in the past six months. These include the Government's Decree No. 57/2020/ND-CP of May 25, 2020, revising the Government's Decree No. 125/2017/ND-CP on the Export Tariff and the Preferential Import Tariff, which has reduced 24 commodity tax groups to remove difficulties for businesses and promote the development of agriculture, mechanics, supporting industries, automotive industry (the tax amount expected to reduce budget revenue is about VND6,000 billion).

Resolution No. 954/2020/UBTVQH14 of June 2, 2020 of the Standing Committee of the National Assembly on adjusting the reduction of family circumstances for taxpayers and dependents to reduce tax liability for individuals with expected tax revenue reduction of about VND10,800 billion each year. In addition, it will continue to exempt agricultural land use tax by the end of 2025 to directly support organizations and individuals engaged in agricultural production with about VND7,500 billion per year.

Regarding the equitization and divestment, in the past six months, only three enterprises have been approved for equitization plans, corporations have divested VND688 billion, collecting VND1,362 billion. In order to speed up the process of restructuring state-owned enterprises, the Ministry of Finance has submitted to the Government amending and supplementing the regulations on transforming a State enterprise and a one-member limited company invested by a 100% state-owned enterprise into a joint stock company, ensuring transparency, maximizing the interests of the State, limiting the loss of capital and state assets in the process of equitization and divestment.

Continue to facilitate

The gradual recovery of activities on the basis of relaxing social distancing is also a strong momentum for the development and this is also the time to enter a new phase of the implementation of the dual task ofcontinuing to combat epidemics and implementing socio-economic recovery.

In a recent report to the Government, the Ministry of Finance affirmed that it would continue to focus on implementing institutional solutions to support businesses and people to restore and stabilize production and business activities, and at the same time, take opportunities for the development in the second half of 2020. Of which, submit to the Government for promulgation a Decree amending Decree No. 134/2016 / ND-CP dated September 1, 2016 to remove problems and issued in recent years to promote production and export of high value-added products; remove difficulties for businesses operating in the fields of footwear, textiles, agricultural, forestry and aquatic product processing.

In line with the Resolution No. 84, the Ministry of Finance is formulating a resolution to be submitted to the Government and to the National Assembly Standing Committee to reduce environmental protection tax on aircraft fuel; continue reviewing and cutting fees and charges to reduce costs for businesses and people.

In parallel with that, continue reviewing, amending and supplementing preferential policies, encouraging production and business development, creating motivation for economic growth; promoting reform of administrative procedures, review, abolish and simplify business conditions; continuing to expand the application of information technology and modernize management methods. Thus, enterprises and people can be further facilitated.