VCCI proposes extending the support measures by June 2022

VCCI proposes extending support measures by June 2021

The development of the above draft Resolution at this time is extremely necessary, meeting timely the expectations of people, businesses that are facing many difficulties due to the epidemic.

This draft Resolution gives tax support solutions including a reduction in corporate income tax payable in 2021 if taxpayers have a total revenue of less than VND 200 billion in 2021; Value-added tax reduction from the effective date of the Resolution to the end of 31 December 2021 for enterprises in some sectors; Reducing the payable tax amount arising from production and business activities during 1Q and 2Q2021 for households and individuals doing business in all fields.

However, VCCI said, amid a prolonged COVID-19 outbreak, most businesses only can return to the new normal and gradually restore their operations by 1Q2022 at the earliest. Therefore, VCCI proposes extending support measures for coronavirus-hit businesses and individuals until the end of June 2022.

Besides, the draft Resolution also planned to reduce the Value-Added Tax (VAT) by 30% for services such as tourism, restaurants, hotels, transportation, movie screenings, etc. However, the VCCI said that this VAT reduction should be increased to 50% to put a stronger rebound for coronavirus-hit sectors.

Especially, according to the Report on Impact Assessment of the COVID-19 epidemic on Vietnamese enterprises released at the end of 2020, the micro, small and medium-sized enterprises suffered a big loss in revenue amid COVID-19. Therefore, the tax reduction policy for coronavirus-hit businesses with a revenue of less than VND 200 billion in 2021 will remove many SMEs from the list of beneficiaries. VCCI proposed this policy should be applied to businesses with a revenue to less than 300 billion VND.