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DEPUTIES DEBATE TAX EXEMPTION FOR SMES
A policy that may grant up to 30 per cent tax exemption for small-to-medium-sized business (SMEs) to mitigate the adverse effects of COVID-19 was discussed yesterday by National Assembly deputies during a meeting in Hà Nội.
While deputies agreed the policy was needed to support SMEs, and by extension workers employed by them, some have voiced concerns over the direction of the Government's tax exemption policies.
Deputy Nguyễn Văn Thân from northern Thái Bình Province and chairman of the Vietnam Small and Medium Enterprises Association said it should include medium-sized, not just small and micro-sized businesses.
Việt Nam has over 760,000 businesses, of which small-sized businesses account for 93 per cent and medium-sized 4 per cent. Together, they employ a large number of workers and actively contribute to socio-economic development and social security.
"The proposed policy stipulated small-sized businesses with annual sales under VND50 billion (US$2.2 million) are eligible for tax exemption. Meanwhile, the official definition for small-sized businesses are those with income under VND100 billion and employ less than 50 workers. As it stands, only around half the number of small-sized businesses could qualify under the policy," said Thân.
In addition, Thân said a 30 per cent tax exemption for businesses for the year 2020 won't be much help compared to tax exemption for the year 2019.
"Most businesses likely will struggle this year. It would be a miracle for some of them to survive, let alone making a profit. It's my opinion that a tax exemption for 2019 would be much more relevant and helpful to businesses," he said.
Deputy Phùng Văn Hùng from northern Cao Bằng Province showed support for a policy that includes medium-sized businesses.
"Should businesses make no or very little profit for the year 2020, the tax exemption amount won't account for much," he said.
Deputy Nguyễn Hoàng Mai from southern Tiền Giang Province urged the Government to reconsider and include businesses that employ more than 100 workers, saying during this difficult time, it's important to encourage businesses to keep workers on payroll.
Deputy Vũ Tiến Lộc, chairman of Vietnam Chamber of Commerce and Industry, said the Government's tax exemption policy was designed to support workers and it's important that its implementation would cover as many workers as possible.
Aside from the sizes of businesses, Lộc said the Government must also focus on helping businesses at the core of the economy for their importance to economic security and sustainable development such as airlines and tourism.
Minister of finance Đinh Tiến Dũng said along with tax exemption other measures were being implemented to support businesses, saying the Government had reduced, and in some instances removed, numerous expenses for businesses such as land use and some 18 other administrative fees.
Meanwhile, businesses owners might still apply for other forms of tax reduction including income tax and qualified dependents as stipulated in a decision by the NA's Standing Committee.
Dũng said his ministry was working on a plan to cut by half the car registration fee to encourage domestic car production and to reduce environment fees for the airline industry.
Vietnam’s GDP growth is forecast at 3.1% in 2020 before rebounding to 7% next year, while ASEAN+3 growth is predicted to sink to 0% in 2020, according to the ASEAN+3 Macroeconomic Research Office (AMRO).
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