News Bulletin 16 - Week 1 June, 2020
As the economy awakens from its Covid-19 slowdown, the Vietnamese government and relevant organizations continue to implement policies to support businesses recover. Just last week, the government announced two additional policies to stimulate the economy - reducing several taxes and fees and formulating attractive incentives policies for new foreign investments.
Noticeably, the Standing Committee of the National Assembly has allowed the increase of the monthly tax-free threshold from July 1.
The past week spotlight
Vietnam to raise taxable personal income threshold from July
Photo: Vietnam’s new taxable personal income threshold to take effect from July.
The Standing Committee of the National Assembly has allowed the increase of the monthly tax-free threshold from July 1 in a move to make the cost of living match inflation.
Accordingly, the threshold will be raised from VND9 million (US$389) per month to VND11 million (US$475).
Additionally, the family circumstance-based deduction for each dependent of a taxpayer will also be increased from VND3.6 million (US$155.42) per month to VND4.4 million (US$189.96).
Let’s look at some other related financial and business news during the past week:
1. Post-pandemic focus for new investments
A series of favourable policies are expected to be issued by the government’s upcoming taskforce in the country’s bid to attract a new investment wave after the health crisis.
2. IFRS adoption roadmap raises challenges to property businesses
The recent Ministry of Finance (MoF) ruling to adopt IFRS will send ripples across real estate businesses, especially those with extensive asset portfolios.
Decision No.345/QD-BTC establishes revised compliance requirements for specific groups of enterprises but allows flexibility on adoption timelines and how IFRS is approached. The new reporting standards will become mandatory for almost all businesses after 2025.
3. FDI attraction - one of five key solutions to post-Coronavirus economic recovery
The Foreign Direct Investment (FDI) capital flows over the recent five months of 2020 only decreases compared to the same period last year but rises against the same period of the previous years.
Of the figure, the newly-registered capital and additional capital hit US$7.44 billion and US$3.45 billion, respectively while the capital contribution and share purchase of foreign investors stood at US$3 billion.
4. January-May foreign investment inflows reach $13.9 billion, promising strong rebound
Although the total foreign investment capital in the first five months of this year reported a decrease of 17 per cent on-year, however, capital inflows are expected to increase once again thanks to drastic government measures to grab opportunities from the global wave of investment relocation.
5. Permanent gov’t members discuss cooperation projects with Laos
Prime Minister Nguyen Xuan Phuc presided over a meeting of permanent government members in Hanoi on June 3 to review and boost the implementation of collaboration projects and programmes with Laos under agreements signed between the two countries’ leaders.
6. Government starts reviewing socio-economic development in May
Cabinet members started to review the national socio-economic situation in May – the first month after the social distancing measures were lifted and the economy entered the “new normal” period – during a Government meeting in Hanoi on June 2.
7. PM targets powerful, prosperous status for southern key economic region by 2035
Prime Minister Nguyen Xuan Phuc on May 30 requested the southern key economic region to strive to become a powerful and prosperous region by 2035, ten years ahead of the deadline for the same goal for the whole Vietnam.
8. Government cuts taxes, fees to support automakers, airlines
The Vietnamese government is supporting the post pandemic recovery of car makers, airlines and small businesses by reducing several taxes and fees.
In a decree issued Friday it cut registration fees for locally produced cars by half until the end of the year. Registration fees are 10-15 percent of a car price in Vietnam.
Special consumption tax on locally produced cars will be deferred until the end of the year starting March.
9. New wave of EU investment whipped up by coming FTA
A new period of EU investment development in Vietnam is right around the corner, as the historic EU-Vietnam Free Trade Agreement (EVFTA) is expected to be adopted by the National Assembly early next month.
10. PPP draft details key sector focus
Investors will be allowed to pour money into five groups of projects under the form of public-private partnerships in Vietnam as per a related law that offers an international-standard dispute resolution mechanism.
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