VietNamNet Bridge – The Ministry of Culture, Sports and Tourism has proposed the Government halve value-added tax (VAT) and exempt or cut corporate income tax by 50% for enterprises joining a planned tourism promotion program in the final three months of this year and throughout next year.

Illustrative image. – File photo

The ministry made the proposal to help the local tourism sector ride out difficulties and compete with rivals in regional countries. Currently, prices of tourism products and services in Vietnam are higher than in regional markets where many travel stimulus programs have been launched, and this has eroded the competitiveness of local travel enterprises and put a dent in the development of the sector.

Besides the tax exemption and reduction proposal, the ministry is seeking special policies from the Government to speed up infrastructure development for the tourism industry and ensure safety for tourists.

The ministry plans to implement the national tourism promotion program later this year and next in order to woo more domestic and international tourists, drum up tourism products by offering discounts in low seasons and create new products for the tourism sector.

Many domestic travel firms have initiated their own promotion programs. However, they are still expecting support from the Government in terms of taxes so as to further cut prices of their products and services to attract more tourists given protracted difficulties at home and rising regional competition.

According to a travel firm, the current corporate income tax rate applicable to the tourism sector is 22%.

The Government used to apply similar tax reductions in 2009 for the companies joining the then national travel promotion program entitled “Impressive Vietnam”, with VAT cut by half and corporate income tax payments delayed by nine months.

International visitor arrivals in Vietnam in the year to September had picked up over 10.4% against last year’s same period to 6.06 million, according to the General Statistics office. There were 32.4 million domestic tourists in the period, up 7.6% year-on-year.

Source: SGT