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Minister Dinh Tien Dung and representatives of leading agencies and departments attend the meeting at the Ministry of Finance headquarters. Photo: Minh Tuan.

Financial support more than 220 trillion VND

According to Minister Dinh Tien Dung, the most important solution proposed by the Ministry of Finance is to extend, exempt, and reduce taxes, fees, charges, land rent to the tune of more than 220 trillion VND to support businesses and people.

In particular, the MMinistry has submitted to the Government for promulgation Decree No. 41/2020/ND-CP on extending payment of taxes and land rents to people affected by THE Covid-19 pandemic, effective April 8/2020.

With this Decree, the deadline for tax payment of FIVE months for VAT and corporate income tax of enterprises is extended; VAT and PIT of business households and land rent of businesses, organisations and individuals.

“In the process of developing the decree, we have received the opinions of the ministries, branches, businesses and business associations to supplement and expand the scope of policy implementation. According to Decree 41, it is expected that about 98% of businesses are operating, ie about 740,000 enterprises are entitled to tax breaks and land rents with a total amount of about VND 180 trillion”, said Minister Dung.

The Ministry of Finance has also instructed the tax agency to facilitate procedures for households and individuals to declare a flat tax exemption/reduction due to suspensions/breaks calculated for the whole month, including in case of non-full break of the month.

Taxes, fees and charges have been actively exempted. Specifically, the import duty on medical supplies and medical equipment has been exempted for prevention of Covid-19 pandemic; submitted to the Government to amend and adjust import and export tariff to remove difficulties for enterprises operating in footwear, textiles, processing of agricultural, forestry, fishery, aquatic products, mechanics and industry, auxiliary and the automotive industry. It is expected that this adjustment will help reduce the State's obligation to pay State budget in 2020 to more than 6 trillion VND.

In addition, the Ministry of Finance has proposed the Government submit to the National Assembly at the May meeting to implement a preferential policy of corporate income tax to support small and micro enterprises from July 1, 2020 (according to the initial schedule, it is expected to be applied from 1 January, 2021).

It is expected to apply the tax rate of 15-17% depending on the size of the business and the number of employees of the enterprise, and also allow the exemption of CIT for two consecutive years from the time the enterprise has a taxable income. Small and micro enterprises are newly established from business households.

In case of implementation from July 2020, it is expected about 700,000 enterprises (accounting for about 93% of the total number of enterprises in the country) will benefit, thereby reducing the obligation to pay the state budget in 2020 to about 7.8 trillionVND (the whole year is 15.6 trillion VND).

Also according to Minister Dinh Tien Dung, the Ministry of Finance reported to the Government the Resolution of the Standing Committee of the National Assembly on raising the family circumstance-based reduction of personal income tax. In which, it is expected to increase the reduction for the taxpayer himself/herself from 9 million VND/ month to 11 million VND/ month, for each dependent from 3.6 million VND/month to 4.4 million VND/month.

The adjustment will have about 6.8 million beneficiaries, of which about 1 million will not generate personal income tax payable in 2020. The total income employees is retained to spend. Thanks to this adjustment, this year will be about 10.3 trillion VND.

The support policies proposed by the Ministry of Finance can receive comments from ministries, sectors, businesses and associations to supplement and expand the scope of their implementation. Photo: Minh Tuan.

In addition, the Ministry of Finance is working with ministries and agencies to review and reduce many types of fees and charges for businesses and citizens.

These include exemption of license fees for cooperatives, unions of agricultural cooperatives and businesses, newly established households, individuals, branches, business locations of small businesses and just established when the business is exempted from licensing fees, reducing 70% of enterprise registration fee; 67% reduction of business information publication fee; 50-70% reduction of fees for evaluation and amendments to postal operation licenses.

The total fees and charges cut in the remaining period of 2020 are about VND 500 billion.

At the same time, the Ministry of Finance also issued a circular to adjust 10-50% discount for nine service groups and completely exempt prices for six service groups in the securities field applied at the Stock Exchange and Vietnam Securities Depository Centre.

Arranging VND 36 trillion to support labourers

At the beginning of the spending, the minister said the State budget has prioritised resources of 16.2 trillion VND to prevent and control epidemics.

In particular, about VND 9.5 trillion has been allocated to both central and local budgets to purchase medical equipment and devices to prevent and control Covid-19. It is expected that further spending may need to be increased in response to this pandemic.

Along with that, spending about 6.7 trillion VND to spend the priority regime of allowances for the forces participating in the prevention and control of the Covid-19 pandemic; expenses for meals for isolated people, medical examination and treatment during isolation.

The Ministry of Finance also prioritises the allocation of about VND 36 trillion from the State Budget to implement the Government's Resolution in direct support of cash for six groups of subjects with a deep income reduction, loss, underemployment, difficulties, does not guarantee a minimum standard of living, is affected by Covid-19 pandemic; additional support for some target groups enjoying preferential and social protection policies during the pandemic outbreak period.

In addition, the State budget must actively allocate resources to strengthen national reserves (mainly food), timely support people in areas difficult due to natural disasters, pandemics and ensure no one is hungry. Besides, it is required that the insurance business enterprises ensure the rights of the insured affected by the disease.