According to a recent survey result for 15 countries and territories around the world, Vietnamese are the most optimistic about a post Covid-19 recovery, with 80 percent believing the economy will recover quickly. The proof is that Vietnam businesses and government doggedly fought the Covid-19 pandemic impacts by allowing limited business continuation and also imposing measures to restrict the spread of the Covid-19 pandemic. During the past week, the Vietnamese government proposed a number of tax policies to help business affected by the pandemic.
The past week spotlight
Ministries propose tax breaks for coronavirus-hit businesses
An employee sits in a closed business on Ba Trieu Street, Hanoi, April 13, 2020. Photo by VnExpress/Ngoc Thanh.
The Ministry of Planning and Investment has proposed a 50 percent cut in income tax for small and medium businesses; and an equal cut in value added tax (VAT) for raw materials, goods and services. Meanwhile, the Finance Ministry has proposed a deferment in tax payment from five months to a year.
Let’s look at some other related financial and business news during the past week:
1. Lessons for Vietnam from the EU’s imminent financial strife
Shaken by the coronavirus crisis, the world economy is currently stumbling. The European Union as well as Vietnam has taken various measures to halt the pandemic. In view of all these drastic measures, the question is legitimate whether the economic, political, and social side effects and damage justify this harsh approach on the one hand and how Vietnam and the EU can get out of the crisis on the other hand. Against the background of the EU-Vietnam Free Trade Agreement (EVFTA), suitable companies, products, services, and channels must be identified that can revitalise trade and direct investment.
2. Tax cuts proposed from SMEs to accelerate growth after COVID-19
The Ministry of Planning and Investment has asked for corporate income tax (CIT) to be cut for small and medium-sized enterprises (SMEs) by half this year in an effort to boost growth when the COVID-19 pandemic eases.
The policies will also include adjustments to deductions on personal income tax, exemptions or reductions for environmental protection tax, and a 50 per cent reduction of registration fees for domestically-produced cars and special consumption taxes for the domestic automobile industry.
3. Agricultural land tax exemption policy proposed to be extended to 2025
The Government has submitted a proposal to the National Assembly to extend the agricultural land tax exemption policy to the end of 2025 to support farmers and encourage the development of agriculture.
The Ministry of Finance said an estimated VNĐ7.5 trillion (US$3.2 billion) in agricultural land tax would be exempted every year in the 2021-25 period, which was expected to return to the sector as an investment to expand production, improve productivity and product quality.
4. Protecting at-risk groups with timely fiscal policies
The Vietnamese government has been urgently deploying sturdy solutions to assist enterprises and investors, and those hit by the coronavirus pandemic. Dr. Chi Tran, researcher/associate lecturer from the School of Economics and Finance at Queen Mary University of London, delves into the government’s policies in conditions of financial constraints to fight against the health crisis, with a reflection in the case of the United Kingdom.
5. Hanoi adopts plans to help enterprises to continue their production
Vuong Dinh Hue, Politburo member and Secretary of the Hanoi Municipal Party Committee, has met twice with the Party Committee of the Hanoi Business Bloc to discuss measures to cope with the COVID-19 pandemic. What were the outcomes of these meetings?
Hue reiterated the Party’s resolve to stand by enterprises. He expressed his confidence that Hanoi will achieve all its targets. In addition, recommendations and proposals were noted and specific tasks were assigned by the Party official.
7. Historic low oil prices hardly impact Viet Nam's economy at this time
Oil may reach its lowest price in history this week but its impacts on the world economy and Viet Nam have been limited at this time when the COVID-19 pandemic is keeping people at home and transportation has been cut off.
[…] According to forecasts by global firms and US analysts, crude oil prices would likely increase in June or July 2020.
The COVID-19 pandemic is a constantly evolving global health crisis that is creating a huge range of challenges for individuals and businesses around the world. As governments take unprecedented action to prevent the spread of the virus, businesses are facing an ever-more complex environment to operate within.
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