The Ministry of Finance (MoF) has submitted a range of tax solutions tothe Government in order to remove difficulties and help promotedevelopment of enterprises.
Deputy Minister of Finance Do HoangAnh Tuan in an interview with Nhan Dan newspaper said that theimplementation of tax incentive package could lead to reduce Statebudget collection at first, but in the current difficult context, it wasnecessary for the State to share difficulties with the businesscommunity and the people.
*There are a lot of tax solutionsavailable to help enterprises overcome difficulties and boost productionand business. So, why did the MoF continue to submit to the Governmentnew tax solutions?
In recent years, due to the impact of theglobal economic crisis, Vietnam’s economy and the business communityhave faced many difficulties and challenges. With support measures forenterprises being deployed during the last months of 2013 and the firstsix months of this year, the economy recorded some positive signs ofrevival but was still in turmoil. For that reason, it is essential tohave more measures to support business development.
PrimeMinister Nguyen Tan Dung issued Directive No. 11/CT-TTg dated May 21,2014 on resolving difficulties and promoting the development ofbusinesses towards successfully accomplishing the nationalsocio-economic development tasks by 2015, in which he assigned the MoFto devise taxation and financial solutions for businesses.
Underthe instructions of the PM, plus proposals from the business community,the MoF has drafted a number of solutions and sent them to relatedministries, agencies and localities for comments.
To meetinternational integration requirements and gradually increase nationalcompetitiveness, the Government has issued a range of other documentsincluding the Government Resolution No. 19/NQ-CP on tasks and solutionsto improve the business environment and improve nationalcompetitiveness, the PM’s Directive No. 24/CT-TTg on enhancing themanagement and reform of administrative procedures in the fields oftaxation and customs. Following such guidance, the MoF has submitted tothe Government solutions on simplifying the tax system.
*Amongthe proposed solutions, the business community is particularly concernedabout corporate income tax (CIT). Could you provide more informationabout these tax incentives?
In recent years, policies on CIT havebeen repeatedly amended and supplemented towards creating morefavourable conditions for business operation, improving the investmentenvironment and contributing to an enhanced competitiveness forenterprises. At present, to continue removing difficulties forenterprises and improving economic competitiveness, the Party and Statealways attach great importance to innovation in tax policies in generaland CIT in particular. Since the beginning of 2014, the CIT rate reducedto 22 percent instead of 25 percent as previously, following theimplementation of the 2013 Law on Corporate Income Tax. Meanwhile, thetax rate of 20 percent has been applied for enterprises with revenue ofnot exceeding 20 billion VND (940,000 USD) since July 1, 2013.
Sofar, the auxiliary industry has been not covered by CIT incentives. Thecurrent ones are only applied in some import tax preferences and accessto credit, while incentives on income tax, land rent and land use feesare not enough to encourage enterprises to expand investment in theauxiliary industry.
As for integration requirements, it isnecessary to develop and supplement additional policies to help thedomestic manufacturing sector take initiatives in seeking raw inputmaterials, spare parts, components and accessories. They also helpmanufacturers actively select suppliers, thus reducing manufacturingcosts, increasing competitiveness, and especially avoiding toodependence on a particular foreign supplier.
Therefore, the MoF has proposed special tax incentives for the auxiliary industry.
Atthe same time, there have been amended and supplemented provisions onCIT incentives for particular fields of investment, but theimplementation of such regulations is still causing difficulties andobstacles for businesses and even tax authorities and bodies responsiblefor issuing investment certificates.
To create an openinvestment environment and to facilitate and ensure policies aresynchronised with the applicable provisions of the Law on Investment,the MoF proposed that if enterprises receive less incentives asprescribed by the new policies in comparison with the old ones, theywill continue to benefit from incentives stated in the investmentcertificate.
To be consistent with market economy mechanisms,additional regulations allowing businesses to deduct the cost ofexpenses for employee welfare from taxable income would be issued, asproposed by the business community.
*How does the implementationof this tax-solution package take effect, as well as affect the Statebudget collection task in 2014 and the following years?
Theimplementation of tax-solution package aims to solve difficulties forbusinesses and is an important factor in investment attraction, whichcurrently is tending to shift dramatically from other countries in theregion into Vietnam. Thereby, it also helps bring more resources forbusinesses and create more decent jobs and income for a large amount ofdomestic labour force.
When businesses can handle theirdifficulties, there would be favourable conditions for promotingproduction and business operation, thereby promoting economic growth andcontributing to increased revenue for the State budget.-VNA
Deputy Minister of Finance Do HoangAnh Tuan in an interview with Nhan Dan newspaper said that theimplementation of tax incentive package could lead to reduce Statebudget collection at first, but in the current difficult context, it wasnecessary for the State to share difficulties with the businesscommunity and the people.
*There are a lot of tax solutionsavailable to help enterprises overcome difficulties and boost productionand business. So, why did the MoF continue to submit to the Governmentnew tax solutions?
In recent years, due to the impact of theglobal economic crisis, Vietnam’s economy and the business communityhave faced many difficulties and challenges. With support measures forenterprises being deployed during the last months of 2013 and the firstsix months of this year, the economy recorded some positive signs ofrevival but was still in turmoil. For that reason, it is essential tohave more measures to support business development.
PrimeMinister Nguyen Tan Dung issued Directive No. 11/CT-TTg dated May 21,2014 on resolving difficulties and promoting the development ofbusinesses towards successfully accomplishing the nationalsocio-economic development tasks by 2015, in which he assigned the MoFto devise taxation and financial solutions for businesses.
Underthe instructions of the PM, plus proposals from the business community,the MoF has drafted a number of solutions and sent them to relatedministries, agencies and localities for comments.
To meetinternational integration requirements and gradually increase nationalcompetitiveness, the Government has issued a range of other documentsincluding the Government Resolution No. 19/NQ-CP on tasks and solutionsto improve the business environment and improve nationalcompetitiveness, the PM’s Directive No. 24/CT-TTg on enhancing themanagement and reform of administrative procedures in the fields oftaxation and customs. Following such guidance, the MoF has submitted tothe Government solutions on simplifying the tax system.
*Amongthe proposed solutions, the business community is particularly concernedabout corporate income tax (CIT). Could you provide more informationabout these tax incentives?
In recent years, policies on CIT havebeen repeatedly amended and supplemented towards creating morefavourable conditions for business operation, improving the investmentenvironment and contributing to an enhanced competitiveness forenterprises. At present, to continue removing difficulties forenterprises and improving economic competitiveness, the Party and Statealways attach great importance to innovation in tax policies in generaland CIT in particular. Since the beginning of 2014, the CIT rate reducedto 22 percent instead of 25 percent as previously, following theimplementation of the 2013 Law on Corporate Income Tax. Meanwhile, thetax rate of 20 percent has been applied for enterprises with revenue ofnot exceeding 20 billion VND (940,000 USD) since July 1, 2013.
Sofar, the auxiliary industry has been not covered by CIT incentives. Thecurrent ones are only applied in some import tax preferences and accessto credit, while incentives on income tax, land rent and land use feesare not enough to encourage enterprises to expand investment in theauxiliary industry.
As for integration requirements, it isnecessary to develop and supplement additional policies to help thedomestic manufacturing sector take initiatives in seeking raw inputmaterials, spare parts, components and accessories. They also helpmanufacturers actively select suppliers, thus reducing manufacturingcosts, increasing competitiveness, and especially avoiding toodependence on a particular foreign supplier.
Therefore, the MoF has proposed special tax incentives for the auxiliary industry.
Atthe same time, there have been amended and supplemented provisions onCIT incentives for particular fields of investment, but theimplementation of such regulations is still causing difficulties andobstacles for businesses and even tax authorities and bodies responsiblefor issuing investment certificates.
To create an openinvestment environment and to facilitate and ensure policies aresynchronised with the applicable provisions of the Law on Investment,the MoF proposed that if enterprises receive less incentives asprescribed by the new policies in comparison with the old ones, theywill continue to benefit from incentives stated in the investmentcertificate.
To be consistent with market economy mechanisms,additional regulations allowing businesses to deduct the cost ofexpenses for employee welfare from taxable income would be issued, asproposed by the business community.
*How does the implementationof this tax-solution package take effect, as well as affect the Statebudget collection task in 2014 and the following years?
Theimplementation of tax-solution package aims to solve difficulties forbusinesses and is an important factor in investment attraction, whichcurrently is tending to shift dramatically from other countries in theregion into Vietnam. Thereby, it also helps bring more resources forbusinesses and create more decent jobs and income for a large amount ofdomestic labour force.
When businesses can handle theirdifficulties, there would be favourable conditions for promotingproduction and business operation, thereby promoting economic growth andcontributing to increased revenue for the State budget.-VNA
