Financial support package will contribute to promoting economic growth

Prof. Nguyen Nhu Quynh, Deputy Director of National Institute for Finance (Ministry of Finance)

The Ministry of Finance is drafting a Resolution of the National Assembly Standing Committee on a number of revenue collection solutions to support businesses and people affected by the Covid-19 pandemic. How do you evaluate the significance of this support package?

Currently, the Covid-19 pandemic has broken out again and has developed complicatedly, greatly affecting production and business activities of enterprises and business households and individuals, especially small enterprises, and the activities of a number of service sectors such as tourism, transportation, accommodation and dining, cinema, sports and entertainment. It poses many challenges to achieving the economic growth target in 2021. At the same time, it affects social security for employees working in these fields.

Therefore, the Ministry of Finance is studying to submit to the Government and National Assembly Standing Committee a number of revenue collection solutions to support businesses and people affected by the Covid-19 pandemic, such as a policy of reducing payable tax amount of corporate income tax in 2021; reducing payable tax amount arising from business activities of the 3rd and 4th quarters of 2021 for business households and individuals; reduce value-added tax for some groups of service sectors that are heavily affected by the pandemic; exemption of late payment interest, land use levy and land rent.

In the context that enterprises, households and business individuals face many difficulties due to the impact of the Covid-19 pandemic, I thought those were very timely and important solutions to help to solve difficulties for businesses and people, thereby helping them to have resources to maintain and develop production and business activities.

Moreover, through maintaining production and business activities of enterprises, those policies would also contribute to maintaining and creating jobs as well as incomes for employees, contributing to ensuring social security.

Any support package at this time is also valuable to people and businesses. However, for promoting the effectiveness of the support in time, what is needed?

In the past, in order to promote the highest effectiveness of the policy in supporting people and businesses, as well as minimizing unnecessary administrative procedures, the Ministry of Finance had strengthened communication so that all entities in society could access information about current fiscal support packages. In addition, the order and administrative procedures to enjoy support policies have been simplified.

Furthermore, the Ministry of Finance had also coordinated with ministries, sectors and localities to most effectively implement support policies for the people. In addition, the work of removing difficulties in the implementation of support policies had also been strengthened.

Currently, not only businesses and people but also the State are facing difficulties, especially in revenue collection. So, what needs to be done so that financial policies can both benefit people and businesses, and do not affect the balance of the state budget?

The socio-economic development goal set by the Government aims to promote economic growth, at the same time ensure social security, reduce unemployment and poverty in society. Therefore, the implementation of many support packages of tax reduction, fees, charges and land rents was necessary to ensure the Government's goals.

The implementation of tax and revenue support policies affected the revenue collection in the supported areas. However, to ensure the goal of state revenue collection, the Ministry of Finance has been implementing synchronous solutions. Accordingly, for short term solutions, strengthening the management of state revenue collection, combat revenue loss and tax evasion, especially revenue from e-commerce activities and economic activities arising from the digital economy, revenue from assets and real estate business.

In the long term, continuing to study and expand the tax base on the basis of an overall review of the tax policy system in order to amend and supplement taxes that are not yet consistent with reality; increase tax rates for goods and services that discourages production and consumption by the State; reviewing and removing tax incentives that are no longer appropriate.

In addition, when the fiscal support packages are applied, they will contribute to promoting economic growth, helping businesses accumulate capital to maintain and expand production and business activities, and nurture revenue.

Thank you!