Experts approve delaying corporate taxes amid COVID difficulties

Thursday, Mar 04, 2021 08:55

Tax and fee payment deadlines for companies are set to be deferred by three to five to help mitigate the worst effects of COVID-19. — Photo Courtesy

The Government needs to extend the deadlines for the payment of taxes and fees to support companies since the COVID-19 pandemic continues to affect them, experts have said.

Chu Tien Dung, chairman of the HCM City Union of Business Associations, said a recent proposal by the Ministry of Finance to defer taxes is timely and good for businesses.

HCM City is the country’s economic hub, and companies there have been badly affected by the lack of human resources, since workers from other provinces have failed to come back in time after the Lunar New Year in mid-February.

On top of that, social distancing and cleaning up the workplace have pushed off their costs, he said.

“Though the economy grew last year, businesses faced great difficulty.

“The first quarter is the time a new year begins, and so the Government should defer taxes to enable businesses have cash for the short term.”

It would be effective if the extension lasts two quarters instead of three to five months as recommended by the ministry, he said.

Economist Le Dang Doanh too backed the ministry proposal, saying the tax and fee deferment would enable companies to have money to pay for expenses at the beginning of the year.

“The State budget might be facing difficulties, but a three-month delay is practicable.”

Experts however emphasised that tax delays are only a short-term solution, and the driving force would be an improvement in the business environment.

According to the proposal made by the ministry, value-added tax, corporate income tax, personal income tax, and land rental tax will be extended by three to five months.

They will amount to VND68.8 trillion worth of value-added tax-deferred by five months and VND40.5 trillion worth of corporate income tax delayed by three.

The deferred taxes on business households and individuals will be around VND1.3 trillion and land tax will be worth VND4.4 trillion.

The ministry said the taxes and fees would be paid by the end of this year, and so the Government’s 2021 revenues would not be affected. — VNS

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