To revive economies, many governments adopted flexible tax policies to help their business communities to revitalise and develop amid economic turmoil. Remarking on this effect, Mrs Nguyen Thi Cuc, Chairwoman of the Vietnam Tax Consulting Association, is kind enough to grant an interview with the Vietnam Business Forum on the sideline of the workshop on “Tax Strategy to Live through Economic Recession” held in Hanoi recently.
How have tax payments by Vietnamese companies in the context of economic recession?
In principle, in the context of economic recession, the difficulty of companies in Vietnam as well as in other countries in the world is not tax although it is a matter of concern for enterprises. Pertaining to tax field, all companies now want to have a clear, transparent and stable tax policy system and simple administrative procedures. When economic recession happens, companies expect supports from governments, for example, tax reduction and tax breaks to ride out the tough time.
How has the Vietnamese Government supported companies to weather the crisis?
To help Vietnamese companies get through the economic crisis, the Government adopted urgent measures to ward off economic downturn and maintain economic growth, including the package of tax measures in 2009 and 2010, helping many companies to avoid debt and bankruptcy.
In 2009, the Government reduced 30 percent of payable corporate income tax in 2009 for small and medium-sized enterprises, extended the duration of corporate income tax payment by nine months, cut 50 percent of VAT on many goods, and returned VAT on exports to companies.
In 2010, the Government extended the duration of corporate income tax payment by three more months for SMEs, apparel and footwear companies; and returned VAT on exported goods. The Government also extended VAT payment on imports and VAT refund by another 60 days on imported machines, equipment and transport means which local companies cannot make, extended VAT payments on imported materials for manufacturing animal feeds, fertilisers and pesticides.
After the economic recession ended, the Ministry of Finance issued three circulars vis-a-vis taxes, namely the Circular 94/2010/TT-BTC dated June 30, 2010 on instructions on refunding VAT on exports; the Circular 92/2010/TT-BTC dated June 17, 2010 on procedures for Vat extension and refund for equipment, machines and transport means local companies cannot make, and the Circular 128/2010/TT-BTC dated August 26, 2010 on temporary adjustments to VAT payments on inputs for animal feed, animal feed, fertiliser and pesticide production. These three circulars created more favourable conditions for enterprises to supplement forces to stabilise production and business activities.
Do you have any advice for businesses in implementing tax measures before such active supports from the Government?
First of all, enterprises must take full advantage of preferential tax measures launched by the Government. Besides, they must promote internal resources, raise competitiveness to maintain and expand the market, overcome challenges and expand business activities by using consistent measures to boost domestic sales and export.
Thank you very much!
Vietnamese
