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Workable policies under review
In 2011, the Government and relevant ministries adopted a number of policies that proved workable in controlling inflation, stabilizing the macro-economy and ensuring social welfare.
The key policies included:
Agricultural land use tax exempted for ten years
The National Assembly’s Resolution 55 on agricultural land use tax exemption and reduction effective from January 1, 2011 to December 31, 2020 is of great significance as up to 70% of the population lives in rural areas and farmers are now counted 10 million.
Especially, the resolution prioritizes the tax exemption for agricultural land serving research and experimental production and poor households.
PIT exemption by late 2012
The Ministry of Finance on November 11, 2011 issued Circular 154/2011/TT-BTC on certain tax solutions to unbind difficulties for enterprises and individuals.
Accordingly, personal income tax (PIT) exemption is only applied for taxable income from business activities in the first tax bracket of the Partially Progressive Tariff generated from August 1, 2011 to December 31, 2011.
Under the Government’s Decree 101/2011/NĐ-CP dated November 4, 2011, 30% of corporate income tax (CIT) in 2011 was exempted for small and medium-sized enterprises; 30% of CIT was cut for enterprises which use intensive labors in the fields of production and processing of agricultural – forestry – aquatic products, textiles, leather and footwear, electronic components, and economic and social works.
Transformation of 100% SOEs
Decree 59/2011/NĐ-CP, dated July 18, 2011 regarding the transformation of 100% State-owned enterprises (SOEs) to join-stock companies gives a boost to the SOE equitisation process after it experienced a standstill in the past two years.
The decree stipulates that enterprises subject to equitization must not be the ones whose entire chartered capital is held by the State (as decided by the Prime Minister in each specific period) and whose State capital still remains after financial treatment and business valuabtion.
Encouraging supporting industries
Under Circular 96/2011/TT-BTC dated July 14, 2011, which came into force on August 18, 2011, soft financial policies will be adopted to encourage the development of supporting industries in the manufacturing of machinery and electronics, information technology, automobile production, as well as the textile-garment and leather shoes sectors.
Projects that support high-tech products will also be given income tax breaks in accordance with the Law on Corporate Income Tax.
Construction materials and materials used for software production that are unable to be produced inside the country will also enjoy tax exemption.
Imported commodities – including magazines and textbooks which are used for high technology research and development – will not attract tax.
Several projects invested in remote areas will benefit from a zero tax rate for materials they imported. These materials are not made domestically, excluding the manufacturing of motorbikes, air conditioners, electric heaters, refrigerators, washing machines, fans, dish washers and kettles.
Tourist permit extension
Circular 44/2011/TT-BCA, which was effective since August 14, 2011, extends the duration of transit and touring for foreign tourists to 15 days instead of five days.
Foreigners who get a Việt Nam Touring and Travelling Licence must pay a levy.
When transit foreigners leave the country, they must return the Viet Nam Touring and Travelling Licence to the Immigration Office at a border gate.
Lethal injection for capital execution
The Government’s Decree 82/2011/NĐ-CP, which took effect since November 1, 2011, stipulates that lethal injection will be used for capital execution instead of firing squads.
The practice enforces the Law on Execution of Criminal Sentences which took effect on July 1, 2011./.
Hương Giang
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