Government considers reducing a series of taxes and fees due to Covid-19
Instead of just having tax deferrals, businesses and people facing difficulties due to Covid-19 can have environmental tax, corporate income tax, VAT, registration fees reduced...
According to the draft Resolution on tasks and solutions to remove difficulties for production, business, and disbursement of public investment capital, which is being consulted by the Ministry of Planning and Investment, there will be additional fiscal solutions on exemption and reduction of taxes and fees for businesses and people. After the Government finalizes these solutions, they will be submitted to the National Assembly Standing Committee and the National Assembly for comments.
Registration fees for domestically manufactured or assembled cars will be reduced by 50% until the end of 2020; corporate income tax will be reduced by 50% for small and medium enterprises in 2020; and VAT rate will be reduced by 50% (currently 10%) for goods, services, and input materials.
At the same time, it will consider refunding VAT in 2020 for some industries that are heavily and directly affected by Covid-19 such as aviation and tourism; reducing tolls, seaports, road maintenance, aviation service prices (parking fees, take-off and landing fees, flight operations fees, security screening fees, ground service fees)...
A series of businesses on Chua Boc Street (Hanoi) had to temporarily close due to Covid-19.Photo: Ngoc Thanh
The Ministry of Finance will study extending the deadline for paying corporate income tax in 2019, value added tax, personal income tax, and land rent to one year instead of five months. Business households affected by Covid-19 will be allowed to defer or postpone paying lump-sum tax like enterprises; 100% exemption of business license fees in 2020...
In addition, the Government will give opinions to submit to the National Assembly Standing Committee and the National Assembly in April on reducing environmental protection tax on input fuels, especially E5 RON92 bio-fuel.
The idea of reducing environmental protection tax on gasoline was mentioned by the Ministry of Industry and Trade in a report sent to the Government in early April. Currently, the environmental tax is at 3,800 VND per liter for E5 RON92 gasoline and 4,000 VND for RON95 gasoline. This agency also suggested that instead of imposing a mechanical tax, the environmental protection tax on E5 RON92 gasoline should be based on the emission level (75 - 80%) of the tax on mineral gasoline.
In addition, the Government can exempt or reduce fees and charges, such as fees for appraisal of licenses for exploitation and use of water resources, exploitation of hydrometeorological data, licensing of banking activities, appraisal of construction projects, and fees for granting construction practice certificates to individuals.
The plan to reduce pork import tax, delay payment of part of export tax for 5 months (until the end of the second quarter) and temporarily adjust tax rates for some areas such as import tax on aviation fuel... will also be reported by this agency and submitted to the Government.
Previously, from April 8, people and businesses facing difficulties due to Covid-19 were allowed to defer or postpone tax and land rent payments according to the Government Resolution. According to the Ministry of Finance's estimate, the amount of tax and land rent extensions is up to VND180,000 billion and 98% of businesses will be eligible for the policy.
