Tax extension: Reducing financial pressure for enterprises

Mr. Le Van Hai, Director of Trong Tin Accounting and Tax Consulting Company Limited - Hanoi Branch

That is the opinion of Mr. Le Van Hai, Director of Trong Tin Accounting and Tax Consulting Company Limited - Hanoi Branch, when evaluating the tax extension policy that is proposed by the Ministry of Finance.

Many supportive financial policies have been issued to help businesses to overcome the difficulties of the Covid-19 pandemic. How do you assess the impact of these policies?

Our country has gone through a difficult time due to the impact of the Covid-19 pandemic.

Faced with that situation, the Government has issued many financial policies to support businesses and employees such as the exemption and reduction of corporate income tax, value-added tax; extension of tax payment deadline for businesses; and support for employees.

Those policies, directly and indirectly, affect businesses. In particular, the tax exemption and reduction policies have helped businesses significantly reduce financial pressure, creating more opportunities for businesses to overcome difficulties.

Recently, the Ministry of Finance has completed the draft Government Decree on extending the deadline for tax and land rent payment in 2022. In the current context, what does the promulgation of an extension policy mean for the business community, sir?

The recent wave of Covid-19 has caused heavy damage to the economy. In the period of normalization with the pandemic, considering Covid-19 as an endemic disease, this is a key time for businesses to recover.

The issuance of financial policies to support businesses at this time is really necessary to give strength to the business community, especially with the policy of extending tax payment deadlines and land rent, directly helping businesses to take advantage of their own financial resources, concentrate financial resources on production and business activities, create resilience to overcome difficulties and create a new face for the business.

The fact that the Ministry of Finance has completed the draft decree on extending the deadline for tax and land rent payment in 2022 to submit to the Government for promulgation has shown the Government's determination in economic recovery, showing its concern for accompanying and sharing difficulties with businesses, creating a strong belief in the business community.

The extension of the deadline for paying tax and land rent is not a new policy, however, the extension this time includes value-added tax, corporate income tax, and personal income tax. In your opinion, to effectively implement this policy, how specific should the Decree be?

In order to effectively implement these policies, the management authorities need to promote communication and dissemination to people and the business community, who are supported by following the spirit of the draft, and coordinate with media agencies in communication.

In the process of guidance for the implementation, tax authorities need to provide detailed and consistent instructions between levels of competent authorities and localities in accordance with the spirit of the Decree, avoiding inconsistencies.

At the same time, it is recommended to expand the beneficiaries of the policy to organizations and enterprises in essential goods.

Along with that, in my opinion, the management authorities must reduce administrative procedures, and abolish the procedure for submitting "Application for extension of tax payment and land rent and water surface rent" because this is in the interest of taxpayers, based on the spirit of self-determination and self-responsibility.

How do businesses and individual taxpayers take advantage of this regulation so that the support is practical for production and business activities, sir?

Taxpayers and businesses need to proactively approach and grasp policies in a timely manner through reliable and official communication channels such as tax agencies' dissemination offices to support taxpayers, magazines and newspapers and radio stations of the State; seriously and thoroughly research in order to actively and thoroughly apply the spirit of the Decree, to avoid misunderstandings leading to sanctions.

During the implementation of the Decree, if there are problems, businesses and individuals can contact tax authorities directly for support and guidance on the most complete and accurate implementation. They can contact reputable tax consulting organizations and tax agents for specific instructions.

A note to businesses and individual taxpayers in implementing this policy is that the time to pay tax after being extended falls at the end of the year. This is the time when a lot of money is needed to carry out payment activities for suppliers, and year-end bonuses for employees. Therefore, in order to avoid disruption of cash flow, businesses and individuals need to have a clear and thorough financial plan.