Minister Ho Duc Phoc discussed investor-friendly financial reforms
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- Socially Responsible Enterprise
- 22:54 19/09/2022
DNHN - During the Prime Minister's Conference with companies on investment policies and some taxes, the Ministry of Finance recommended the Government issue decrees and the Government and National Assembly revise tax laws under the development process and the current trend.
Minister of Finance Ho Duc Phoc discussed the financial policy of tax exemptions and reductions for international investment.
Vietnam has recently reduced the standard tax rate from 25% to 22%, and now to 20%; in the sectors of investment incentives, the tax rate has been reduced to 10%. Depending on the subject, the preferential tax rate can be 9% within 30 years, or tax-free for six years and a 50% reduction in tax due for the next thirteen years. According to the Minister, this system is extremely preferred.
In compliance with rules, the government has published Decree 134 and Decree 18 on import and export taxes to give investment incentives and tax exemption and reduction programs. In addition, the Ministry of Finance has recommended that Decree 126 be issued in 2019 to guide the Law on Taxation and incentives for priority firms in the direction of tax refunds first and inspections second. It is also a question of simplifying administrative processes for businesses and paying tax on the 10th of the next month according to the customs declaration that has cleared or released products in the previous month. Priority enterprises of countries having Vietnam-specific reciprocal recognition agreements are permitted to employ customs priority and tax procedures in Vietnam.
For ordinary investment projects, the tax exemption period is 4 years, and the tax payable is reduced by 50% for the next 9 years for the income of enterprises making new investments in the field of socialization and implementing in the difficult locality and particularly difficult socio-economic conditions; Exemption for 4 years or reduction of 50% of tax payable in the following 5 years for the enterprise's income from the implementation of new investment projects in the field of socialization.
Concerning incentives for land rent and water surface rent, the Vietnamese government has published Decree 46, Decree 135 and Decree 123. For example, in economic zones, they are excused from paying land rent for 11 years, and in places with unique problems, they are exempt from paying land rent for 15 years.
The Ministry of Finance has emphasized administrative procedural reform, particularly in the tax and customs fields. The Ministry of Finance has encouraged the government to announce Decision 508 on April 23, 2022, to approve the 2030 tax system reform strategy. The Ministry of Finance has included 150 tax administrative operations at levels 3 and 4 on the National Portal and introduced electronic tax payment and declaration. Consequently, the system of electronic tax declaration, tax refund, and tax payment is similarly electronic, with 96.6%, 98.9%, and 97.7% of firms participating in the declaration, respectively.
The banking industry has implemented the ASEAN Single Window and improved customs clearance using contemporary customs management techniques.
The Minister asserted, "We are dedicated to collaborating with international investors to overcome obstacles and improve the investment and growth process." The Ministry of Finance continuously inspects and addresses violations, ensures a very transparent and healthy stock market, and promotes medium- and long-term capital mobilization for the developed and integrated economy with the global economy, all while ensuring a transparent and efficient public investment environment.
In 2022 and 2023, the Ministry of Finance also urged the Government to establish a VND 347 trillion stimulus package to boost economic development, high growth, job creation, and post-pandemic recovery. This package is quite beneficial, such as assisting employees to rent homes, supporting 40,000 billion with 2% interest on loans for enterprises or basic health care, creating employment, concentrating on infrastructure, and constructing motorway networks. Tax exemption and reduction for enterprises up to 233 trillion dollars, including reduction of value-added tax from 10% to 8%, exemption of 37 types of levies, exemption and reduction of an environmental tax on gasoline, and other programs.
"We are committed to changing administrative operations in customs clearance, and more than 99 per cent of customs procedures are completed electronically using an automated system. We will continue to strengthen the tax and customs sector with electronic systems, AI management, and risk-based weighing, therefore increasing transparency and streamlining operations for companies," shared the Minister.
PV
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