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Joined: 08 Feb 2012
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 Posted: Wed May 09, 2012 5:52 am Post subject: Government to bail out domestic businesses |
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The Ministry of Finance (MoF) announced five bailout packages including tax breaks and VAT moratoriums in order to support enterprises in overcoming economic difficulties.
Many business dissolved for short of capital
The MoF said that in early 2012, over 18,700 new businesses had been established, down 10.2% on the same period last year. Moreover, the number of dissolved and bankrupted companies is reported to have reached 10,350, of which 23.1% of the companies had existed for only one year and 41.9% for two years.
Those enterprises seeking licensing to operate in mining, real estate, banking and finance greatly reduced in number.
In the first quarter of 2012, revenue on goods and services dropped 7% compared to last year, the financial index declined while the cost of borrowing increased.
In order to help the enterprises and economy, five measures were agreed including management policies on the macro-economy, public expenditure, taxes and fees, prices and subsidies and tax administrative procedures.
MoF also proposed to provide an additional VND1 trillion (USD48 million) for dikes and infrastructure in rural areas.
The MoF will introduce a six-month VAT moratorium. This package will be applied to taxes due in April, May and June 2012. Land use fees will also be reduced by 50% and the deadline to pay fee extend by 12 months to enterprises in difficulties.
Corporation income tax collection will be reduced by 30% and the deadline will be extended for taxes due in the last nine months of 2011. The sectors to benefit from the measure include steel, cement, mechanical material manufacturers and waterway transport. Households focused on aquaculture or salt processing will be exempt from licensing taxes.
The ministry has also pushed back the introduction of a road maintenance fee payable by drivers to the end of 2012.
Landlords who rent rooms to workers, students or for use as private kindergarten classes will be exempt from VAT and income tax, on the condition that prices remain reasonable.
MoF said that the packages have to follow international rules and give support to those enterprises most in need. Combined with other fiscal policies, the move aims to lower interest rates and create favourable conditions for enterprises.Travel to Vietnam
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