Tax support policies help revive businesses after pandemic

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4854 3348 12  2010 IMG 5044 1 - Tax support policies help revive businesses after pandemic
Production at Phuc Thinh Packing Trading Company Limited. Photo: T.D

More resources to support businesses

Nguyen Trong Hoang, Deputy Director of Phuc Thinh Packing Trading Co., Ltd (Nha Be District, Ho Chi Minh City), said the Covid-19 pandemic hampered the company’s production and business activities. In particular, during the social distancing period, the company’s sales plunged about 70%.

Meanwhile, the company had to spend more than VND700 million for wages, social insurance, electricity and water, as well as loan interest per month. Therefore, the policies on reduction, exemption and payment extension of corporate income tax and land rent in the recent tax finalization period are significant to the company, helping the company have financial resources to pay production costs, especially wages for employees.

As one of the companies benefiting from the tax payment extension policy from Decree 52/2021/ND-CP dated April 19, 2021 of the Government, Ms. Nguyen Thi Thanh Thuy, Director of Thuy Lan Service Trading Co., Ltd, said that the extension of tax payment has helped reduce the payment pressure of the company. This is a financial source helping the company with turnover capital, pay off part of their debts and have more resources to restructure production and business.

According to the HCM City Tax Department, by the end of September 30, 2021, the tax authorities in the area issued 1,403 decisions on value added tax (VAT) refund with a total refund of VND10,431 billion. Previously, under Decree 52 of the Government, the HCM City Tax Department exempted and reduced VND123 billion for 86,197 business households.

The Binh Duong Department of Taxation said the unit has also promptly implemented policies on tax and land rent payment extension for beneficiaries. Specifically, the unit extended the payment of tax and land rent for 3,145 taxpayers, including 3,139 businesses and organizations, and six business households, with a total deferred amount of VND3,557 billion. In addition, the Tax Department of Binh Duong province also refunded tax for 2,267 records with a refund of VND13,087 billion.

Enterprises “revive” production

So far, over 92% or more than 1,300 companies and factories in export processing zones and industrial zones (EPZs and IZs) in Ho Chi Minh City have reopened. In particular, at Ho Chi Minh City Hi-Tech Park, 100% of enterprises have resumed operations. The Management Board of Binh Duong Industrial Parks said as of October 28, 1,968 enterprises in industrial zones in Binh Duong province restored production and business activities, reaching over 96%. Similarly, in Dong Nai, over 92% of enterprises in the province’s industrial zones have restored production.

Despite reopening after social distancing, many businesses said they are still facing many difficulties such as labor shortage, high cost of production materials, etc. Accordingly, they have proposed extending support policies on taxes to restore production.

Public Relations (PR) Director of TST tourist company Nguyen Minh Man said after nearly two years of being affected by the Covid-19 pandemic, in addition to the Government’s support policies in accessing the vaccine source to ensure ‘green cards’ to prepare to restore production, a series of financial solutions have just been applied to support workers who lost their jobs and reduce deposits for domestic and international travel companies.

Most recently, Resolution 406/NQ-UBTVQH15 of the National Assembly Standing Committee issuing a number of solutions to support businesses and people affected by the Covid-19 pandemic has contributed to help businesses recover and improve the ability to restore operation. This is meaningful not only for travel companies but also for the economy to bounce back strongly.

Sharing the same opinion, Ms. Nguyen Khanh Giang, Director of Phuc An Import-Export Transport Company, said that now, the operations of enterprises have gradually been restored. However, the costs and price of gasoline rose but the transportation costs of the company did not, making operations of company face many difficulties.

“With the tax reduction under Resolution 406, it will partially help the company restore operations. The company is looking forward to receiving quick support on procedures for tax exemption and reduction,” said Giang.

Appreciating the support policies of the Government and the National Assembly for businesses, Mr. Nguyen Dang Hien, General Director of Tan Quang Minh Manufacture and Trading Co., Ltd (Bidrico), said the State should reduce 30% of corporate income tax for all businesses, because currently, those whose sales reached over VND200 billion will not be supported under Resolution 406.

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Moreover, to stimulate production, Mr. Nguyen Dang Hien proposed the State to consider VAT. This will create a balance, encourage production and consumption, and activate the economy. He said, when businesses enjoy VAT reduction, they will indirectly reduce product prices, bringing benefits to consumers. As we do not know when the pandemic will end, the reduced prices also partly boost consumer demand. When consumer demand increases, production activities of enterprises will increase, and the economy can also resume.

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