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Businesses want tax reduction, MOF only allows tax payment delay
Businesses keep indifferent to the government’s decision to accept a tax payment delay, saying that the tax payment deadline extension would not help them overcome the difficulties.
Despite the bailout, businesses keep dying
The government’s bailout was launched four months ago, when businesses unanimously entreated for help. However, the support still cannot stop the “bankruptcy wave,” while the number of businesses getting dissolved or bankrupted keeps rising rapidly.
The national economy has witnessed the dissolution of 40,190 enterprises over the last nine months, an increase of 6.5 percent in comparison with the same period of the last year. The figure is nearly equal to the number of businesses newly set up every year.
In the third quarter of the year alone, the number of dead businesses increased by 52 percent. Meanwhile, according to the Ministry of Finance (MOF), 6100 businesses have revived thanks to the tax payment deadline extension.
“The bailout proves to be too small in comparison with the current difficulties businesses and people are facing. Therefore, the bailout’s efficiency remains modest,” commented Nguyen Dinh Cung, Deputy Head of the Central Institute for Economic Management (CIEM).
An MOF’s report showed that by September, the total amount of VAT payment extension approved for 190,280 businesses had reached 11 trillion dong. As such, every business can get the payment extension of 57 million dong worth of VAT.
With the total amount of the corporate income tax payment extension worth of 2933 billion dong approved for 71,640 businesses, each of them can have 40 million dong worth of working capital.
With the government’s decision on the 50 percent land leasing fee reduction in 2012, the 2425 businesses could save 250.3 billion dong, or which of them could save 103 million dong.
Similarly, in terms of excise, the 33,510 aquaculture and salt households can save 10 billion dong, and each of them can save 298,000 dong.
Deputy Minister of Finance Do Hoang Anh Tuan said at a recent meeting with businesses--that the tax payment extension has helped revived thousands of businesses, because the businesses can have more working capital to resume their production.
However, businesses have said they feel disappointed with the government’s bailout.
Businesses want more than what the government can give
Nguyen Tien Nghi, Deputy Chair of the Vietnam Steel Association VSA, said the steel manufacturers’ proposal on VAT reduction has not been approved.
“The most expected support businesses are expecting from the government is the measure to help boost sales,” Nghi said. “We need tax reduction, not tax payment extension.”
He explained that steel mills have been trying to clear the inventories by reducing sale prices, which can be done only if the government accepts the tax reductions.
Luong Van Vinh, General Director of My Hao Cosmetics Company, said that his company does not register the VAT payment extension, because this does not help much, while it would take the company time to follow administrative procedures.
According to Vinh, My Hao has the turnover of 80 billion dong a year. If My Hao delays the VAT payment of 8 billion dong, it would “incur the debt” of 8 billion dong which it would have to pay the next year.
In the latest news, the Ministry of Industry and Trade has mentioned the possibility of cutting VAT from 10 percent to five percent for four industries, namely textile and garment, fertilizer, chemicals and footwear.
However, a senior executive of the Thai Nguyen Garment Company told VietNamNet that this would not have much significance to the enterprises which specialize in making products for export.
vietnamnet
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