Finance Ministry rejects tax reduction proposals
The Ministry of Finance has rejected several proposals to reduce taxes to help revive production and trade and support businesses affected by Covid-19.
A number of ministries, departments and associations have proposed cutting several taxes including the natural resource tax, environmental protection tax, personal income tax, corporate income tax for small- and medium-sized enterprises, agricultural land-use tax for small and micro enterprises, agricultural land-use tax for households and farmers and value-added tax (VAT) for aviation fuel and fresh pork.
The Ministry of Finance rejected the proposal to reduce corporate income tax by 50% for small- and medium-sized enterprises and cooperatives because it overlaps some policies that will soon be effective.
The ministry also disagreed with the proposal to reduce VAT by 50% for input materials as well as goods and services that have been severely affected by Covid-19 to reduce input costs for enterprises. It explained that the proposal had been rejected because VAT is paid by consumers, not enterprises.
Moreover, it rejected the proposal to reduce environmental protection tax by 50% for transport fuel, except aviation fuel, because fuel prices have already dropped sharply.
The proposal to reduce registration fees by 50% for locally manufactured or assembled automobiles until the end of this year was rejected because it violates international commitments to fair trade that Vietnam has signed.SGT
The Ministry of Planning and Investment has asked for corporate income tax (CIT) to be cut for small and medium-sized enterprises (SMEs) by half this year in an effort to boost growth when the COVID-19 pandemic eases.
The Vietnamese Government is set to issue a decree on the lists of preferential export tariffs and special preferential import tariffs to implement the EU-Vietnam Free Trade Agreement (EVFTA) when the deal comes into force in Vietnam.