Policy on tax and fee exemption and reduction effective support to people and businesses

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Many fiscal policies have been issued to support businesses. Photo: S.T

Policies remove difficulties

The Ministry of Finance in 2021 issued many policies to support people and businesses. The total amount of taxes, fees, charges and land rent that the State supports for businesses and people reached about VND138 trillion.

These solutions have played a significant role in recovering the economy and restoring production for enterprises. Thus, Vietnam's economic growth has also achieved positive results despite the pandemic.

From the beginning of 2022, the National Assembly adopted Resolution 43/2022/QH15 which reduces 2% value-added tax (VAT) on goods and services subject to VAT, reduces green tax on jet fuel to remove difficulties for the aviation industry; reduces many taxes and fees, including registration fees for domestically produced cars.

The Ministry of Finance estimates that the total reduced amount of taxes, fees and charges in 2022 will be about VND88,000 to VND90,000 billion. Along with that, many policies on tax and fee exemption and reduction are being consulted by the Ministry of Finance and submitted to the Government.

The VAT reduction is one of the policies that has been appreciated by people and businesses. From February 1 to the end of December 31, 2022, the VAT on goods and services has been reduced from 10% to 8% to support people affected by the Covid-19 pandemic, promoting the recovery and development of production and business activities. According to the Ministry of Finance, these policies are expected to reduce state budget revenue in 2022 by about VND51.4 trillion.

Although the state budget will fall, the policy will help businesses, organizations and people overcome difficulties caused by the Covid-19 pandemic, and stimulate consumption and investment, thereby contributing to the recovery of the country's economy after the pandemic and implementing social security, said the Ministry of Finance.

So far, after nearly three months of implementation, a survey at some supermarkets shows that prices of some goods have declined due to tax reduction, so the payment of buyers was also significantly reduced. This helps curb inflation, especially in the context that domestic gasoline prices are increasing according to the general development of the world.

Ms. Le Thi Huong Giang, Director General of An Phat Informatics Service Trading Co., Ltd. said the pandemic has greatly affected the company’s activities. The supply of goods was short, commodity prices increased and the supply chains were disrupted.

Many shops were forced to temporarily close. However, thanks to the policy on corporate income tax applied in 2021 and the VAT reduction policy from the beginning of 2022, the company has seen impressive growth. Many shops have reopened and seen revenue in the first quarter of 2022 increasing by 70% year-over-year.

"The tax exemption and reduction policies have helped An Phat save a lot in payable taxes. This not only helps the company increase accumulation, build up internal resources, improve competitiveness but also the price of products sold by An Phat has also been restructured more reasonably in parallel with other incentive and promotional programs to stimulate the purchasing power of consumers," said Ms. Le Thi Huong Giang.

Policies are expected to be effective

Dr. To Hoai Nam, Standing Vice President and General Secretary of the Vietnam Association of Small and Medium Enterprises, said due to the impact of the Covid-19 pandemic, more than ever, support policies have become more important to the community.

According to a survey by the association, up to 70% of enterprises are satisfied with the support policies. Fiscal policies not only provide financial support but also create confidence and help the business community feel the responsibility and care of the Government and State agencies.

Many experts also said that the proposed fiscal policies are now appropriate in terms of the level and duration of support. However, supportive policies only contribute to the resilience of enterprises; the core issue still lies within enterprises and the general resilience of the economy.

It is suggested that it is necessary to review fiscal supportive policies to provide the appropriate help to businesses and industries; pay attention to the absorption of each industry.

Moreover, fiscal policy should aim to promote targeted public investment, ensuring fairness so that the small and medium business community can enjoy as well as large enterprises. Moreover, businesses must also plan to proactively adapt, produce and do business, making good use of all opportunities offered by the economy and State agencies.

According to National Assembly Deputy Hoang Van Cuong, in other countries, when a pandemic occurs, the Government often offers support packages for all people; they use money to distribute to everyone to ease difficulties.

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But Vietnam is different, we do not use money to distribute to everyone, but the fiscal policy packages are a package to support all people. Therefore, management agencies need to promptly bring policies to the right beneficiaries.