Fiscal policy helps economic recovery and development

In order to support businesses and promote economic recovery, the Ministry of Finance continues to propose many policies to support businesses and people in 2023. Photo: H.Anh

Continue to propose many policies to support businesses and people

Entering 2023, the situation in the world and in the country has become increasingly complicated, which has affected the economy, people's lives and the production and business situation of enterprises. In order to remove difficulties for enterprises, a series of solutions have been actively researched and developed by the Ministry of Finance.

Accordingly, the Ministry of Finance has proposed to the competent authorities solutions to reduce and extend taxes, fees and land rents which is applicable to 2023 with a total support package size of about 198.4 trillion VND,

Of which, the amount of exemption or reduction is VND 77.2 trillion and the extension amount is VND 121.2 trillion.

Specifically, the Ministry of Finance has submitted to the Government to submit to the Standing Committee of the National Assembly for promulgation Resolution No. 30/2022/UBTVQH15 dated December 30, 2022 to reduce environmental protection tax on gasoline, oil and grease, which takes effect from January 1, 2023 to December 31, 2023.

This policy is expected to support people and businesses with about 38 trillion VND. Along with that, on April 14, 2023, the Ministry of Finance submitted to the Government for promulgation Decree No. 12/2023/ND-CP on extension of payment of VAT, CIT, PIT and land rent in 2023. It is expected that the amount of tax and land rent to be considered for extension is about VND 110 trillion.

Currently, the Ministry of Finance is collecting appraisal opinions from the Ministry of Justice and will submit them to the Prime Minister for consideration and promulgation as soon as possible on a 30% reduction in land and water surface rents in 2023 with the decreased amount of about 3,500 billion VND.

Notably, the Ministry of Finance continues to propose to reduce the value-added tax (VAT) and 35 fees and charges in 2023. Accordingly, the Ministry of Finance has submitted to the Government to continue reducing the tax by 2%. Value-added tax for all groups of goods and services is being applied at the value-added tax rate of 10% to 8%, the expected application period from the date the policy is issued to the end of 2023.

This policy will support people and businesses with about 35 trillion VND. The Ministry of Finance is also developing and consulting the competent authorities to continue reducing 35 fees and charges such as fees and charges in the fields of securities, healthcare, granting citizen identification, and appraising investment of construction projects, which is expected to apply from July 1, 2023 to December 31, 2023. This policy will reduce state budget revenue by about 700 billion VND.

In addition, the Ministry of Finance is also coordinating with relevant agencies to study and submit to the Government for promulgation a decree on extending the deadline for paying excise tax for domestically manufactured and assembled cars. The amount of excise tax expected to be extended is about VND 11.2 trillion.

Sharing about the fiscal policies being implemented by the Ministry of Finance, Minister of Finance Ho Duc Phuc said that these are very reasonable solutions and are a significant resource to remove difficulties for businesses although in the first quarter of 2023, state budget revenue was very difficult, economic growth was only 3.32%, import and export turnover also decreased by 17%, state budget revenue by the end of the first quarter of 2023 increased by 2.21%, domestic revenue if minus the unexpected accounts are only approximately 85% over the same period.

“The solutions to overcome the above difficulties are sharing, encouragement and creating conditions for enterprises to develop. Enterprises are both the center and the driving force of economic development, so if enterprises develop, the economy will develop, and fiscal policy will become stronger and stronger. Therefore, the actions of the Ministry of Finance are directed towards enterprises to remove difficulties,” said Minister of Finance Ho Duc Phuc.

Help businesses have cash flow to restructure products

In order for the above policies to be approved and implemented soon, the Ministry of Finance proposes to promulgate policies in a shortened order and procedures.

Sharing more about Decree No. 12/ND-CP, which has just been issued, Mr. Dang Ngoc Minh, Deputy Director of the General Department of Taxation, said that Decree No. 12/ND-CP has been approved by the Government and taken effect.

Right from the date of signing, the Ministry of Finance sent a telegram directing the tax authorities to immediately implement policies related to tax extension and postponement. The scale of this program is equivalent to the scale of implementation in 2021-2022, which will provide direct financial support to businesses and people who are late in paying up to VND 112 trillion, of which VAT is over VND 50,000 billion, CIT is VND42 trillion, land revenue is about VND3,500 billion and for business households, it is approximately 300 billion VND.

“This is a measure that will have a direct impact on the cash flow of businesses. We have experience implementing this solution from 2021-2022. Basically, the order and procedures to apply this regulation are very simple, and have been electronic, businesses only need to submit registration on the system and this regulation will be automatically implemented. This is a regulation that is supported and agreed by the business community and taxpayers," said Mr. Dang Ngoc Minh.

Assessing the fiscal policy solutions that have been and are being implemented, Mr. Mac Quoc Anh, General Secretary of the Hanoi Association of Small and Medium Enterprises, said that in difficult times, preferential policies such as extending or delaying the submission time Tax are very important because it helps businesses to reinvest and set up a risk reserve fund. In the context of financial difficulties, the policy of extending tax payment time helps businesses have cash flow to restructure products. In order for this solution to be more supportive for businesses, Mr. Mac Quoc Anh suggested that the tax extension and deferral period should be longer and that beneficiaries of incentives to extend the tax payment time should consider expanding.

Not only extending the tax payment deadline, Mr. Quoc Anh also expressed his wish that the authorities would soon implement the policy of reducing VAT as in 2022.

“The economic situation is difficult, consumer demand is weak, businesses need to reduce prices to stimulate purchasing power. The tax reduction will help stimulate people's consumption demand," said Mr. Mac Quoc Anh.

According to Assoc.Prof.Dr. Le Xuan Truong, Dean of Tax and Customs Department (Academy of Finance), fiscal policy has actively supported the business community to recover production and business, gradually dominate the market and develop again. It can be seen that the tax obligations for enterprises are quite appropriate, the level of regulation from taxes in Vietnam compared to developed countries is relatively low.

In particular, continuing to maintain the policy of reducing environmental protection tax on gasoline and oil has created conditions to reduce production and business costs for enterprises. Assoc.Prof.Dr. Le Xuan Truong also affirmed that the budget spending policy and solutions to accelerate the progress of development investment spending on the one hand create a premise for the early development of infrastructure for the economy, on the other hand, play an important role as "bait capital" to help enterprises recover and develop.