The National Assembly Standing Committee agreed to add solutions to support businesses and people.

Opinions stated that, given the extremely complicated developments of the Covid-19 pandemic, which has been and continues to seriously and heavily affect the operations of businesses and people, especially small and medium-sized enterprises, business households, individual businesses and production and business activities in industries such as tourism, transportation, accommodation, food and beverage, sports, entertainment, press, television, etc., it is necessary to consider and propose additional solutions to support businesses and people to cope with the impact of the Covid-19 pandemic in 2021.

Reduce many taxes

Regarding corporate income tax reduction, Minister of Finance Ho Duc Phoc said that the Government has accepted and completed the policy of reducing corporate income tax by 30% for enterprises with total revenue in 2021 not exceeding VND 200 billion by adding the condition that total revenue in 2021 is lower than total revenue in 2020. The estimated reduction in state budget revenue according to this proposal is about VND 2,200 billion (a reduction of VND 3,800 billion compared to the proposed content in Submission No. 289/TTr-CP).

Basically agree with this proposal, however, there is an opinion in the review body, the National Assembly's Finance and Budget Committee, that the total revenue of 2021 should be compared with the total revenue of 2019, a year not yet affected by the epidemic. In 2020, the epidemic broke out from the beginning of the year, anti-epidemic measures were implemented, so revenue may decrease very deeply, and in 2021 it will recover but not significantly compared to before the epidemic.

Regarding value-added tax, the Government's new draft proposes a reduction for a number of service sectors from October 1, 2021 to December 31, 2021, with the reduction in state budget revenue under this plan being about VND 5,000 billion.

Chairman of the Finance and Budget Committee Nguyen Phu Cuong said that the review agency agreed with the Government's direction to exclude the field of "online publishing activities" from the scope of support, as this is a field with high growth potential in the context of the epidemic; at the same time, it proposed to remove business activities providing goods/services on online platforms in a number of fields from the scope of application of the VAT reduction policy.

The majority of opinions of the Standing Committee of the Tax Administration Committee agreed with this content, however, some opinions suggested that the policy should only be applied to late payment amounts that have arisen up to the time of issuance of the Resolution, so as not to encourage taxpayers to delay their tax obligations for 2021.

Thus, taking into account the solutions implemented by the National Assembly Standing Committee and the Government under their authority and the proposed solutions, the amount of tax, fee, charge, and land rent that will support businesses and people in 2021 is about 140,000 billion VND, of which: the issued package of extension, exemption, and reduction of tax, fee, charge, and land rent is about 118,000 billion VND; the package of tax exemption and reduction, and exemption of late payment fees according to the above proposed contents is about 21.3 trillion VND.

“A piece when hungry is worth a whole package when full”

Commenting on this content, National Assembly Standing Vice Chairman Tran Thanh Man emphasized that the endurance of businesses has decreased sharply when the epidemic lasts for a long time, especially the fourth wave causing heavy damage nationwide. The Party and State have had many support solutions, but more policies are needed to reduce difficulties for businesses and people.

Mr. Tran Thanh Man also suggested that it is necessary to calculate the application period as well as the level of the solution reasonably, especially for service types such as tourism, hotels, transportation... or the implementation of corporate income tax reduction also needs to consider whether small and micro enterprises meet the proposed conditions or not.

National Assembly Chairman Vuong Dinh Hue speaks at the working session on the morning of September 16. Photo: National Assembly

With value added tax being an indirect tax, the reduction is to stimulate consumption so that both consumers and businesses benefit. Therefore, Mr. Vuong Dinh Hue noted strict management, clear responsibility for implementation and supervision, otherwise "the intermediary benefits from going through many roundabout buying and selling stages".

The National Assembly Chairman also emphasized that businesses need cash flow the most because it can decide whether to survive and operate or not, so it is possible to study more support options based on costs, instead of based on the amount of tax payable (reducing tax rates), to support even unprofitable or even loss-making businesses.

“If the Government does not submit, will the National Assembly agencies have a legislative initiative to submit to the National Assembly on this issue? We have to think about the most effective and feasible way,” Mr. Vuong Dinh Hue asked, at the same time saying that there is a policy of spending not much budget money but very meaningful for a certain enterprise that is facing extreme difficulties.

Reporting further at the discussion session, Minister of Finance Ho Duc Phoc said that the proposed tax amount under normal conditions is only equal to what Ho Chi Minh City collects in 20 days, but in times of difficult conditions, with assistance from the National Assembly, the Standing Committee of the National Assembly, and the Government, it is like "a piece of food when hungry is worth a package when full".

After discussion, members of the National Assembly Standing Committee voted unanimously to issue a resolution on a number of solutions to support businesses and people affected by the Covid-19 pandemic. In conclusion, Vice Chairman of the National Assembly Nguyen Duc Hai requested the submitting agency to coordinate with relevant agencies to collect comments to complete the draft for submission for signing and taking effect before October 1, 2021./.