On June 18, the Government issued Resolution 93 on key tasks and solutions to promote growth, control inflation and stabilize the macro-economy. The Resolution emphasizes three main goals: prioritizing growth, associated with macroeconomic stability; operating a reasonable, focused and key fiscal policy; and strictly controlling deficit spending and foreign public debt.
The resolution emphasizes four principles: closely monitoring the situation, analyzing, forecasting, and having timely, appropriate, and effective policy responses. Immediately removing bottlenecks, difficulties, and obstacles, especially legal issues for production and business.
Resolution 93 also sets out many key tasks and solutions, including solutions to proactively, flexibly, promptly and effectively manage monetary policy; coordinate synchronously, harmoniously and closely with a reasonable, focused and key expansionary fiscal policy; and continue to remove difficulties for people and businesses.
The highlight of the reasonable expansionary fiscal policy is that the Government has recently issued Decree No. 64 extending the deadline for payment of value added tax, corporate income tax, personal income tax and land rent in 2024.
This is indeed good news for businesses and individual business households. This is the 5th year since 2020 that this policy has been introduced and applied to support businesses and people to overcome the difficulties of the Covid-19 pandemic. And even now, when the pandemic has long passed, the National Assembly and the Government continue to accompany people and businesses in the recovery period.
Extension of tax and land rent payment in 2024
Simply put, instead of having to pay taxes on time, the extension policy will help businesses and people pay later from 2 to 5 months depending on the type of tax. This is considered a short-term loan, without any interest for businesses and people, to help reduce the financial burden. Decree 64 allows a 3-month extension of corporate income tax for the second quarter of this year. For VAT, business households and enterprises are granted a 5-month tax payment extension, starting from May to September. As for land rent, 50% of the amount payable will be extended for the last 2 months of the year, November and December. Regarding the subjects of the extension, except for insurance, securities and banking businesses, the remaining industries are all beneficiaries.
Enterprises restore production after more than 4 years of enjoying tax payment extension policy
Although the extension period this year is shorter than previous years, according to reporters, business households expressed excitement and said that this will be a motivation to support them to continue to restore production and business.
At Lam Son Company Limited, a company specializing in the production of spare parts for cars and motorbikes. From 2020 to now, the company has continuously enjoyed the tax payment extension policy, with an amount of over 20 billion VND. Thanks to this amount, the company has additional temporary capital for production and business.
An automatic robot, it costs more than 1 billion VND. For more than 4 years, the company has used the money from tax extension to buy 1 more robot each year to increase labor productivity.
Mr. Dang The Nguyen - Director of Lam Son Company Limited said: "During the Covid days, we had a very difficult time. To overcome it, thanks to the timely policies of the Government, we were able to supplement capital and invest in more equipment. Including automation equipment to reduce labor for workers. Through tax extension over the past 4 years, we have invested in 5 robots, productivity increased by 1.7-1.8 times compared to the previous day. And the income of workers has also increased".
For VPC packaging printing company, the extension of taxes over the past 4 years has helped the company use more than ten billion VND that it does not have to pay immediately to renew equipment. The 6-color printer was imported from Japan for 36 billion VND.
"When we imported printers, our orders increased a lot. Specifically, in 2023, our revenue was 188 billion. In 2024, it is expected to reach 200 billion. It is expected that the additional VAT we pay will be 3 billion, and the corporate income tax will increase to 1.5 billion," said Ms. Nguyen Thi Hong - Finance Director, VPC Printing and Packaging Joint Stock Company.
As for businesses with limited capital, any support, even the smallest, is valuable.
"In difficult times like this, if the Government issues that Resolution, people will be very excited. They pay about ten million a quarter, because in difficult times, worrying about paying taxes is also a problem," said Ms. Nguyen Thi Tuyet - a business owner in Hanoi.
Mr. Cao Van Thang - Head of the Tax Department of Dong Anh District, Hanoi City said: "When businesses and households in the area were granted tax extensions, they used the extended tax money for production and business activities without having to calculate interest. Thus, businesses have financial resources, proactively and immediately, without having to borrow from banks. This is a condition for the future development and growth of businesses".
It is estimated that in Hanoi alone, according to Decree 64, people and businesses will be granted an extension to pay taxes of about 13,000 billion VND.
People and businesses are given an extension to pay 84,000 billion VND in taxes.
700,000 billion VND, this is the total support package for the period from 2020 to 2023 that the National Assembly and the Government have issued to extend and reduce taxes and fees for people and businesses. This fiscal policy has been really effective, as in recent years, production and business of people and businesses have gradually recovered. Evidence is that in recent years, the State budget revenue has exceeded the estimate. In particular, revenue from production and business is increasingly large.
The General Department of Taxation also estimated that the total package of tax and land rent deferral policies from now until the end of this year is about VND84,000 billion. Maintaining a continuous fiscal policy for more than 4 years has shown the listening and companionship of the National Assembly and the Government with businesses. This will be an important driving force not only for economic growth at this time but also for the following years.
The total estimated package of tax and land rent deferral policies from now until the end of the year is VND84,000 billion, of which VAT is VND52,000 billion. Corporate income tax is VND27,000 billion. Land rent is VND3,000 billion, and business household tax is VND450 billion.
The representative of the General Department of Taxation said that many solutions are being implemented to help businesses and enterprises benefit from the extension policy correctly, fully and promptly.
Mr. Dang Ngoc Minh - Deputy General Director of the General Department of Taxation, Ministry of Finance said: "Basically, we have done these things in the past 4 years. The tax sector has also upgraded its information technology system to create the simplest conditions for procedures. This policy supports people with temporary resources to serve production and business. But by the end of the year, all will be paid into the budget, without affecting the budget collection plan for 2024".
"In that closed circle, we see the impact on production, on businesses, and on society in general, it is very good. Everyone wants that. The solution package under Resolution 43 is the most effective solution package among all the tax solution packages that the National Assembly and the Government have handled," said Ms. Nguyen Thi Cuc - President of the Vietnam Tax Consulting Association.
The accumulated budget revenue in the first 5 months of this year is estimated at over VND898,000 billion, equivalent to 52% of the estimate. Of which, domestic revenue increased by nearly 17% over the same period. This shows that domestic production and business are still stable and growing compared to 2023.
A key solution in the expansionary fiscal policy stated in Decree 93 is that the Government has submitted to the National Assembly for consideration to continue implementing a 2% VAT reduction for the last 6 months of this year. This policy is expected to be commented on and approved by the National Assembly next week at the 7th Session of the 15th National Assembly.
If approved by the National Assembly, this will probably be the next "push" for businesses and people to actively produce and trade, promoting growth in accordance with the spirit of Resolution 93 of the Government.
Source
Comment (0)