Tax support policies appreciated

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Taxpayers fulfill tax obligations at the tax office of Dong Nai. Photo: ST

The Annual Report of the Provincial Competitiveness Index (PCI) 2020 released by the Vietnam Chamber of Commerce and Industry (VCCI) in collaboration with the United States Agency for International Development (USAID) has shown the assessment results of domestic and foreign-invested enterprises (FDI) on tax administrative procedures.

Specifically, for domestic enterprises, the report said although the administrative reforms have had positive results, enterprises still have problems in certain administrative procedures such as application for tax exemption, reduction, refund and finalization.

Regarding the inspection, underproposals and requests by the Government, the results of PCI investigation in the last five years showed that the number of inspections has tended to decrease.

The number of inspections in 2020 decreased by about 50% compared to 2016.

In 2016, the inspection rate of enterprises by tax agencies was 43.6%, but by 2020, it decreased to 35.5%.

For FDI enterprises, two areas with many shortcomings are tax administrative procedures and social insurance. The tax refund and tax finalization procedures are considered most troublesome. In addition, about 19% of FDI enterprises consider procedures for tax exemption or reduction as a problem, according to the PCI survey.

Meanwhile, only 7% of FDI enterprises assessed the procedures for tax declaration and tax payment as troublesome and only 5% of FDI enterprises had the same views on procedures for registering to buy tax invoices.

This result is also quite similar to VCCI's 2019 Report on Tax Administration Reform, among the business sectors (state, private, FDI), the FDI sector is the least satisfied with tax procedures.

Regarding policies to support enterprises to overcome the Covid-19 pandemic, the PCI 2020 report stated that tax support policies are the most accessible. More than 60% of domestic private enterprises assessed that it was easy to access the policy of expanding the payment deadline of VAT,CIT, tax and land rent.

This statement is similar to that of FDI enterprises. The percentage of FDI enterprises giving such the statement is nearly 60%.

Moreover, tax support policies such as the policy on extension of tax and land tax payment are considered the most useful. The PCI 2020 report said this israther surprising because support policies on corporate income tax are often criticized for only benefiting successful enterprises which already have enough money to pay CIT, while they do not support enterprises that are really affected in terms of revenue and profit (OECD 2020).

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However, 67% of domestic private enterprises and 57% of FDI enterprises have evaluated thatthe policy on the CIT payment extension is useful.