The MoF has submitted the draft decrees to the Government and expect them to be ratified this month, Minh said.

According to the draft, the payment of value added tax (VAT), corporate income tax (CIT), personal income tax (PIT) and land and water surface leasing fees in 2022 will be extended.

Regarding VAT, it proposes a six-month extension for VAT from March to May 2022 and the first quarter of 2022; five-month extension for VAT in June 2022 and Q2 2022; four-month extension for VAT in July 2022; and 3-month extension for VAT in August 2022.

If the plan is approved, the total extended VAT will be VND53.3-54.3 trillion. However, the State budget collection in 2022 won’t decrease because businesses will have to pay tax prior to December 31, 2022.

For CIT, MoF proposes extension of the tax payment that enterprises have to pay temporarily for the second and third quarters of 2022. The extension time is three months. It’s estimated that the total amount of tax to be extended is VND51-52 trillion.

As for business households and individuals, MoF proposes the extension of VAT and PIT in 2022. They will have to pay taxes no later than December 31, 2022. The amount of tax to be extended is VND15.304 trillion.

In addition, MoF has proposed a six-month extension for the payment of fees for leasing land and water surface in 2022, starting from May 31, 2022.

Beneficiaries of the policies include enterprises, organisations, business households and individuals operating in agro-forestry-fishery, construction, entertainment, crude oil extraction, food production, transport vehicles production, waste water treatment, logistics, hospitality and catering services, education, healthcare and real estate.

Credit institutions and branches of foreign banks in Vietnam providing support for enterprises and customers affected by the pandemic could also be subject to extension of tax payment deadline under the decree.

Since 2020, MoF has proposed a number of support solutions related to tax and fees with the total value of VND477.25 trillion, of which VND134.454 trillion was tax exemption and VND342.8 trillion was tax payment extension. 

The tax payment extension is seen as an interest rate-free loan provided by the State, which helps enterprises and individuals have more financial resources.

Many economists believe that extending taxes and land rents benefits companies since enterprises have a substantial flow of cash that they may invest in manufacturing and business, therefore promoting growth.  

According to Ho Duc Phoc, Minister of Finance, the extension of deadlines for payment of taxes and land rental fees is part of the Government’s efforts to support businesses and people to overcome difficulties to recover and develop in the context of declining State budget revenue.

Source: Vietnam News