Vietnam - Thousands of businesses revive thanks to tax exemption policy

VietNamNet Bridge – 6100 businesses have resumed their production thanks to the new policies on tax exemption or tax payment delay, according to the Ministry of Finance (MOF).

MOF’s Deputy Minister Do Hoang Anh Tuan said the Resolution No. 13 of the government on tax exemption and tax payment delay has helped revive thousands of enterprises. The 3-month VAT tax payment delay, for example, has benefited 200,000 businesses, thus allowing businesses to have 11 trillion dong worth of capital to serve their production and business.

If the National Assembly ratifies the Tax Management Law in the upcoming session in October, 2012, which would put the law into effects from July 1, 2013, businesses would have to declare VAT tax once in every three months, instead of once a month as currently applied.

Tuan said this would create more favorable conditions to businesses by simplifying the administrative procedures. Besides, businesses would have more working capital to maintain their production, because they do not have to pay VAT monthly any more.

Tuan has confirmed that 6100 businesses have resumed their production thanks to the impacts from the policy on tax exemption and tax payment delay stipulated in the Resolution No. 13.

The fact that 6100 businesses have revived is really a good piece of news, which would have positive impacts on the national economy. Tuan calls this the “bright parts in the picture about the national economy.”

“We have learnt from the businesses’ tax declarations that their profits have been increasing steadily, month after month. Meanwhile, the number of businesses reporting profit increases by 3-4 percent a month,” Tuan said.

Meanwhile, Cong An Nhan Dan newspaper, also citing the statistics of the Ministry of Finance, reported three weeks ago that 2100 businesses have revived.

Meanwhile, the business circle seems to be not as optimistic as the state management agencies.

The businessmen attending the meeting with MOF’s officials and the General Department of Customs on September 27, once again complained that they were facing too many difficulties, while having proposed to cut down tax further.

The Vietnam Chamber of Commerce and Industry’s (VCCI) Chair Vu Tien Loc said at the meeting that 15 percent of the 1000 polled businesses in a recent survey has complained about the problems in the policies, administrative procedures, about the high taxes and the few opportunities to access information.

Giao thong van tai newspaper has quoted Deputy Chair and Secretary General of the Small and Medium Enterprise Association To Hoai Nam as saying that only a small percentage of enterprises have escaped from the current big difficulties, while the majority of businesses are struggling to survive.

A recent survey conducted by the Ministry of Planning and Investment showed that by the end of June 2012, Vietnam had had 660,000 small and medium enterprises, of which 470,000 businesses are operating, accounting for 71 percent.

Another report showed that in the first six months of 2012, more than 20,700 businesses halted their business, 4100 got dissolved, up by 35.4 percent over the same period of the last year.

The biggest difficulty of enterprises now is the inaccessibility to bank loans. Dr Nguyen Dinh Cung, Deputy Head of the Central Institute for Economic Management (CIEM) said 42 percent of Vietnamese businesses only do business with their own capital and they do not borrow money from anyone.

Of the 58 percent of businesses that borrowed money, 58 percent borrowed from state owned banks, 30 percent borrowed from joint stock banks, 39 percent from relatives and friends, and 5.5 percent borrowed from foreign invested banks.

Compiled by C. V

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