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​​​​​​​Decree must ensure firms benefit from tax cut

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Firms with revenue of less than VNĐ200 billion this year would be eligible for 30-per cent reduction on corporate income tax. — Photo taichinhdoisong.vn

HÀ NỘI — A decree has been published to guide the implementation of a National Assembly resolution offering firms a 30 per cut corporate income tax (CIT) cut.

The draft is up for comment, while the resolution came into effect on August 3.

Under the draft, the tax cut would be given to enterprises with total revenue of less than VNĐ200 billion (US$8.62 million) in 2020 – those considered the most vulnerable to the COVID-19 pandemic’s negative impacts.

In case firms were just founded in 2020 and did not operate for the full 12 months of this year, their revenue would be calculated based on the number of months they actually operated. Specifically, the revenue would be divided by the number of months they operated then multiped by 12 to determine their eligibility for the support policy.

According to the Việt Nam Chamber of Commerce and Industry, the draft decree still lacks a way to calculate revenue of firms which temporarily halted operations.

Tô Hoài Nam, deputy president of the Việt Nam Association of Small and Medium-Sized Enterprises, said that it was not necessary to have a specific regulation for firms which temporarily halted operations.

Nam said the pandemic was heavily affecting businesses and it would be difficult for SMEs, which account for about 97 per cent of the total number of firms in Việt Nam, to achieve revenue of VNĐ200 billion this year.

Nam stressed the decree should not erect any barriers which caused difficulties for firms in accessing the support.

Statistics of the Ministry of Finance showed that as of the end of 2019, Việt Nam had a total of 760,000 firms in operation. The ministry estimated the tax cut would cause a reduction of around VNĐ23 trillion to State revenues this year.

However, the policy was necessary amid the pandemic to help firms to overcome difficulties and recover.

According to the Ministry of Planning and Investment, nearly 63,500 firms withdrew from the market in the first seven months of this year, up 11 per cent against the same period last year.

Among them, 33,000 firms temporarily halted operation, up 40 per cent, while 21,800 registered for dissolution procedures and 8,940 completed dissolution. —

 

Source: https://vietnamnews.vn/economy/771072/%E2%80%8B%E2%80%8B%E2%80%8B%E2%80%8B%E2%80%8B%E2%80%8B%E2%80%8Bdecree-must-ensure-firms-benefit-from-tax-cut.html

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Businesses complain about new CIT payment regulation

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Under the new regulation, by the end of the third quarter, enterprises have to estimate the amounts of tax of the fourth quarter and pay the amounts.

Some of the Decree 126 provisions effective on December 5 related to the Law on Tax Administration, say that the total amount of corporate income tax (CIT) that enterprises temporarily pay in the first three quarters of the year must not be lower than 75 percent of the CIT amounts they have to pay for the whole year.

Businesses complain about new CIT payment regulation

This means that by the end of the third quarter, enterprises have to estimate the amounts of tax of the fourth quarter and pay the amounts instead of the end of the fourth quarter as previously applied.

Dang Ngoc Minh, deputy general of the General Department of Taxation (GDT), told the press on the sidelines of the dialogue between enterprises and customs and taxation agencies held some days ago, that the state budget has a shortage and the purpose of the budget collection is to get money to pay for state management operations, especially to allocate to provinces that cannot cover expenses.

In other words, the budget collection progress plays a very important role in the operations of many localities.

Asked if GDT has received complaints about the new regulation from enterprises, he said these are just a few enterprises and they don’t represent the whole business community.

The official stressed that the tax collection must be done in reference to the local budget management and the benefits of society.

This means that despite the complaints, GDT is still determined to collect tax as planned.

What will happen if enterprises are fined not because they did not pay tax, but just because they did not anticipate the sharp increase in the amount of tax they would have to pay in Q4?

In replay, GDT said it believes that this may happen but not regularly, because enterprises can foresee their business performance.

But enterprises disagreed with GDT about the uncommon number of cases that saw revenue soaring unexpectedly in Q4.

“GDT always sets estimates on state budget collections every year. Will it dare to affirm that it can collect 75 percent of the total budget collections of the whole year by the end of Q3?” a businessman said. “Will it be fined if it fails to do this?”

The businessman went on to explain that no business dares to set revenue targets quarterly, but they only dare set for the whole year.

“Everyone wants to fulfill yearly business plans, but unexpected things always occur. Businesses were preparing for the year-end sale season, when new Covid-19 infections were discovered in HCM City,” he said.

According to GDT, the Decree 126 will take place on December 5. This means that enterprises, seriously affected by Covid-19, will not be affected by the new regulation this year, because the deadline for temporary tax payment was the last day of October, or Q3.

“Who dares to say he will make profit this Tet sale season? With the regulation, it is still unclear which businesses will take a loss and which will make a profit, but all of them now have to make temporary tax payments,” he said.

When the Decree 20 dated in 2017 on the tax administration applied to enterprises with transactions with related parties facing businesses’ complaints, the Prime Minister has repeatedly requested to amend the decree. It took three years to do this.

The decree covers only 8,000 businesses, 83 percent of which are foreign invested enterprises and 17 percent Vietnamese enterprises.

Meanwhile, the number of businesses to be affected by Decree 126 is much higher and the businesses are from many different economic sectors which face difficulties.

The regulation will have a big impact on enterprises and lead to serious consequences, even if it is amended later.

The director of an enterprise warned that businesses that have been hit hard by Covid-19 will become even worse because of the new regulation on temporary tax payment.

“You don’t have money, but you still have to pay taxes in advance, based on the estimated profit you may make in the future. It is just like taxing dreams,” he commented.

Meanwhile, according to GDT, the Decree 126 will take place on December 5. This means that enterprises, seriously affected by Covid-19, will not be affected by the new regulation this year, because the deadline for temporary tax payment was the last day of October, or Q3.

So, enterprises will only have to make temporary tax payment in accordance with Decree 126 by the end of October 2021. 

Duy Anh

Source: https://vietnamnet.vn/en/feature/businesses-complain-about-new-cit-payment-regulation-694866.html

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Vietnam says Oct. CPI up 2.47 pct on year

Vietnam estimated its consumer price index for October jumped 2.47 percent from a year earlier.

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The General Statistics Office said in a report on Thursday that average inflation in the first ten months of this year rose 3.71 percent over the same period of last year.

October inflation slightly rise 0.09 percent against the previous month and December of 2019, the lowest growing rate since 2016.  

Increased prices in education sector and hike food prices due to floods in central region were the main driver of the month’s inflation.

Core inflation in October increased by 0.07 percent over the previous month and by 1.88 percent over the same period last year.

Average core inflation in the first 10 months of 2020 increased by 2.52 percent over the same period in 2019.

The government’s GDP growth target for this year is below 3 percent.

► Vietnam targets 2021 economic growth at 6 percent

Source: https://e.nhipcaudautu.vn/economy/vietnam-says-oct-cpi-up-247-pct-on-year-3337836/

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Vietnam’s trade surplus widens to $18.72bln in ten months

Trade surplus in the first ten months of the year has widened to $18.72 billion, with October surplus estimated at $2.2 billion, according to latest data from the General Statistics Office.

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The surplus became bigger than nine-month achievement which was reported earlier at $16.52 billion.  

In the Jan.-Oct. period, China and US remained the biggest trade partners of Vietnam. The country suffered $28.2 billion trade deficit with China since the beginning of the year.

The Southeast Asian economy exported $37.6 billion worth products to China, up 14 percent while spending $65.8 billion to buy Chinese goods, up 6.2 percent over the same period last year.

For the US market, Vietnam enjoyed $50.7 billion trade surplus in the ten-month period. The States is Vietnam’s largest export market with a revenue of $62.3 billion, up 24 percent, while imports from US dropped 2.4 percent to $11.6 billion.

Generally, in 10 months, Vietnam’s exports was estimated at $229.27 billion, up 4.7 percent, while imports was estimated at $210.55 billion, up 0.4 percent over the same period last year.

In the period, 31 items had export turnover of over $1 billion, accounting for 91.8 percent of the total export turnover and 34 items with an import turnover of over $1 billion, accounting for 89.4% of the total import turnover.

► Vietnam says Oct. CPI up 2.47 pct on year

Source: https://e.nhipcaudautu.vn/economy/vietnams-trade-surplus-widens-to-1872bln-in-ten-months-3337838/

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