Supporting enterprises to overcome difficulties, are preferential taxes and fees necessary?

	Revenue collection of tax sector steps into hard times
	Government considers reducing several taxes and fees
	Ministry proposes cutting taxes for transport firms

Exempting or reducing taxes for the domestic car industry will violate international commitments. Photo: HP

Cannot apply Special Consumption Tax incentive for domestic cars

When participating in the draft resolution, ministries, central agencies, localities and industry associations, enterprises made many proposals on taxes and fees. For example, a proposal for tax exemption or reductionincludingnatural resource tax, environmental protection tax, personal income tax; enterprise income tax for small and micro enterprises;agricultural land use tax for households and farmers,value added tax; taxes on plane fuel and fresh pork.

In addition, suggestions for exemption and reduction of fees and charges including: land rent, enterprise registration fee, electricity fees, appraisal fees for granting and exploiting water resources, fees for exploiting hydro-meteorological data, fees for operating license ofcredit institutions,evaluation fees for construction investment projects, design evaluation fees for construction investment projects, fees for granting construction activity certificates, fees forconstruction practice certificates to individuals,seaport charges, road use charges, aviation service prices; license fees; incurred guarantee fee;loan guarantee fee, registration fee.

Some suggestions include the extension or delay to the tax payment time, focusing on export tax and special consumption tax on domestically assembled and produced cars until the end of December 2020.

Regarding the proposal to reduce 50% of corporate income tax for small and medium-sized enterprises and cooperatives in 2020,the Ministry of Finance proposed to remove this content due to overlap with some proposed policies.

Regarding the proposal to reduce 50% of value added tax (currently 10%)for goods and services in trouble, raw materials to reduce input costs for production of enterprises, the Ministry of Finance proposed to abolish because this is indirect tax,consumers are taxpayers. For enterprises, the entire input value added tax is deducted from the output value added tax when determining payable tax, not affecting the cost of the enterprises.

The Ministry of Planning and Investment has received opinions from the Ministry of Finance, not regulating the reductionbutallowing the postponement of value added tax payments until September 2020 for raw materials, goods and servicesin the sectors affected by the pandemic in order to create conditions for enterprises operating in these sectors to have more working capital to continue investing in other production activities in the period when output goods and serviceshave been sold yet.

Regarding the 50% reduction of registration fees when registering domestically manufactured or assembled cars until the end of 2020, applying special consumption tax incentives for the domestic car industry, the Ministry of Finance said thatthis content violated the commitment of non-discriminationbetween domestically produced goods and imported goods upon joining the World Trade Organization,so the proposal was not included in the draft resolution.

According to the Ministry of Planning and Investment, this was the content proposed by the Ministry of Industry and Trade to encourage the domestic production and assembly of cars. Therefore, the Ministry of Planning and Investment requested the Ministry of Industry and Trade to review and ensurethis proposal not violate Vietnam's commitments on non-discrimination between domestic and imported goodsupon joining international trade organizations.

For contents of delaying the declaration and payment of licensing fees on January 30 of the following year; 100% exemption from license fees in 2020 for business households affected by Covid-19, for business households which have already paid, the amount paid is deducted from the payable license fees in the following years, the Ministry of Finance said that the current regulations allowed the exemption of license fees for households, individuals and groups of individuals newly established in the first year.

For the rest of the subjects, the addition of the license fee exemption regulation in 2020 is not appropriate, because up to now, all of these subjects have paid according to the prescribed regime (no later than January 30 every year).

Many types of fees and charges have been reduced

Regarding recommendations on exemption and reductions of fees and charges, in order to support and reduce difficulties for enterprises and strictly comply with the law on charges and fees, the Ministry of Finance has taken the initiative and coordinated with other ministries and ministerial-level agencies in reviewing and promulgating according to its competence (or submitting to the Government) for promulgation of documents on exemption and reduction of fees and charges.

Accordingly, the license fee has been exempted for: cooperatives, unions of cooperatives operating in the field of agriculture; enterprises, households, individuals and groups of individuals newly established in the first year; branches, business locations and representative offices established by small and medium-sized enterprises during the time when small and medium-sized enterprises are exempt from licensing fees.

At the same time, many fees and charges have been reduced with high reductions such as: 70% reduction of enterprise registration fee collection; 67% reduction of business information publication fee; 50% reduction of fees for evaluation and re-issuance of postal operation licenses; reduction of 50 - 70% of evaluation fee for amendments and supplements to postal operation licenses.

In early May 2020, the Ministry of Finance issued a series of circulars to reduce 50% of fees for granting establishment and operation licenses of banks and non-bank credit institutions; evaluation fees for granting international travel service business licenses and domestic travel service business licenses; fees for assessment and issuance of tour guide cards, some business licenses; fees for assessment and licensing of water resources exploration, exploitation and use; discharge of waste water into underground water sources and practice of underground water drilling conducted by central agencies and exploitation and use fees of meteorological information and data.

Speaking at the Prime Minister's meeting with enterprises held over the weekend, Minister of Finance Dinh Tien Dung also said that this month, the Ministry of Finance would continue to issue 11 circulars to reducethe fees and charges to help enterprises overcome difficulties due to the Covid-19 pandemic. The reduced fees would be implemented from the time of promulgating to the end of 2020. The Ministry of Finance estimated thatthe total fees and charges in the remaining period of 2020 was about VND500 billion.

It is known that the draft Resolution on solutions to overcome difficulties amid Covid-19 was discussed by the Government at the regular meeting in April. With the contents within the Government's authority, the Prime Minister would decide.

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For contents under the authority of the National Assembly or the National Assembly Standing Committee, the Government would give its opinions before submitting.