Reducing a series of taxes fees and interest rates for businesses suffering from Covid-19, Reducing a series of taxes fees and interest rates for businesses, Reducing a series of taxes fees for businesses, Assist businesses under crisis by reducing taxes fees and interest, Assist businesses under crisis by reducing taxes

Reducing a series of taxes, fees, and interest rates for businesses suffering from Covid-19

Due to the heavy impacts from the Covid-19, the Vietnamese Government is doing its best to give out support for businesses suffering from this pandemic. Specifically, the Ministry of Finance is shortening the procedure for approving a tax and fee support package of about 20,000 billion VND. Furthermore, the banks also committed to reducing interest rates by more than 24,000 billion VND.

On the afternoon of August 11, the Government Office held a regular August Government press conference – the first meeting of the Government’s new term after consolidation.

Mr. Dao Minh Tu – Deputy Governor of the State Bank said that in the face of the difficult situation of businesses because of Covid-19, 16 commercial banks have committed to reducing interest rates for businesses depending on the degree of difficulties they are encountering. It is estimated that the interest rate reduction package of these 16 banks is about VND 20,300 billion from now until the end of 2021.

VND ổn định so với USD nhưng đang giảm so với nhiều đồng tiền khác
Reducing a series of taxes, fees, and interest rates for businesses suffering from Covid-19. Source: cafef

In addition, 4 state-owned commercial banks including Vietcombank, VietinBank, BIDV, and Agribank also committed to reducing interest rates for businesses in localities implementing social distancing under Directive 16, with each bank committed to reducing about VND 1,000 billion. These four big banks also pledged to reduce 100% of fees for Ho Chi Minh City and localities that are social distancing.

Thus, the total value of interest rate reduction from the bank for those affected by Covid-19 from now until the end of the year is about VND 24,300 billion.

Assist businesses under crisis by reducing taxes, fees, and interest

Mr. Tu added that last year the State Bank of Vietnam reduced the operating interest rate, facilitating conditions for commercial banks to decrease lending rates by 1.2-1.5%. In the first seven months of this year, the loan interest rate also decreased by about 0.5% compared to 2020.

“Interest rate is an important policy for businesses, so the State Bank directs banks to minimize operating costs and share profits to reduce interest rates for businesses,” Mr. Dao Minh Tu said. Accordingly, the State Bank will strengthen supervision so that the interest rate reduction of banks is substantive, not just plain policies.

Along with lessening interest rates of the banking industry, the Ministry of Finance is also urgently consulting ministries and branches to finalize the tax and fee reduction support package of about VND 20,000 billion. This support package has been approved by the Government.

Mr. Nguyen Duc Chi – Deputy Minister of Finance said that this tax exemption and reduction support package is expected to reduce corporate income tax for small and medium-sized business households with a turnover of less than VND 200 billion. At the same time, reduce 50% of tax payable to business households and individuals, reduce value-added tax (VAT) for businesses in the fields that are heavily affected by Covid-19 such as transportation, tourism, hotel accommodation, etc. In addition, the Ministry also proposes to waive fines for late tax payments and reduce land rent payable in 2021 for all businesses who are encountered difficulties due to the Covid-19 pandemic.

“We are finalizing and will report to the Government and submit to the National Assembly Standing Committee in the nearest meeting so that the policy can be implemented soon,” Mr. Chi informed.

Mr. Chi added, it is estimated that tax and fee support, the extension of tax payment, land rent… from 2020 to now is about VND 118,000 billion.

In order to develop the economy in particular and the society as a whole, we must assist businesses under crisis by reducing taxes, fees, and interest so that the businesses – the backbone of the economy can continue to develop and serve the well-being of our country.

ASL LAW is the top-tier Vietnam law firm for tax law consulting service. If you need any advice, please contact us for further information or collaboration.

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