How does HCMC help businesses recover after long lockdown??
The People’s Committee of Ho Chi Minh City has just contributed some opinions on the reduction of corporation tax, value-added tax, and land rent, the extension of tax payment deadlines, and interest rate support to the draft Decree stipulating some solutions to support enterprises and people affected by the Covid-19 pandemic.
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The HCMC People’s Committee will send these contents to the Prime Minister and the Minister of Finance to supplement and include them in the draft to summarize and submit to the Government.
Specifically, HCMC proposed to reduce 50 percent of corporate tax in 2021 and continue to cut 30 percent of corporate tax in 2022 and 2023 for businesses with annual revenue of less than VND200 billion; allow all costs related to pandemic prevention and control of enterprises, such as costs for Covid-19 testing and medical treatment (if any), food and living expenses, personal protective equipment, including masks, face shields, and disinfectants, and hotel costs for isolation, to be deducted from the expenses of corporation tax.
Regarding taxes for business households and business individuals, the city proposed that they are exempt from personal income tax, value-added tax, special consumption tax, tax on natural resources, and environmental protection tax arising from production and business activities in the third and fourth quarters of 2021, in 2022, and 2023. At the same time, it proposed to exempt the personal income tax for laborers with incomes from wages and salaries subject to tax payment of levels 1 and 2.
HCMC also asked to reduce the value-added tax rate by 50 percent (or the percentage rate) of the last three months of 2021 and the years 2022 and 2023. At the same time, it suggested extending the tax payment deadline until the end of the second quarter of 2022 and slap no penalties for late tax filing in 2021 due to the impact of social distancing following Directive No.16 of the Prime Minister. Local tax authorities actively carry out within their power and do not require taxpayers to make an application.
As for land rent, HCMC put forward to lower land rent by 50 percent in 2021 for all businesses. As for those in the tourism and tourism-related industries, land rent in 2021 will be cut 100 percent. Regarding interest rate support for businesses, HCMC proposed the Prime Minister and the Minister of Finance to add clauses assigning the State Bank of Vietnam to cut the lending interest rates for businesses in the direction that the lending interest rate is not 2 percent higher than that of deposit interest rate; have policies to support loans for refinancing, working capital for production and business activities, guarantee payment for raw material purchase and sale contracts at zero percent interest rate for difficult businesses affected by the Covid-19 pandemic; simplify procedures for support, preferential loans, and debt payment extension, to the draft.
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