Businesses applaud Government’s tax payment deadline extension

The Government issued Decree No. 12/2023/ND-CP dated April 14, 2023, on time extension for payment of value-added tax (VAT), corporate income tax (CIT), personal income tax (PIT), and land rent in 2023. According to the decree, the deadline for the VAT payable from March to May and in the first quarter will be extended by six months.

The extension period is five months for businesses expected to pay the VAT in June and the second quarter, along with a delay of four and three months for those with their payment deadline in July and August, respectively. Meanwhile, the payment of PIT of household businesses and individuals working in priority sectors is delayed until December 31, 2023, at the latest.

The deadline for payment of CIT in the first and second quarters is extended by three months. Individuals, households, and businesses operating in priority sectors are entitled to a six-month deferral of land rent in 2023 from May 31.

The decree takes effect from the date of issuance to December 31, 2023. Nguyen Van Doan, from SKD Vietnam Mechanical Company, said that the Russia-Ukraine conflict and the world market’s inflationary fluctuations pose difficulties for Vietnamese businesses.

“We have never seen such a reduction of orders before,” he said, adding that besides maintaining production, the company needs money to cover salaries, bonuses, and social insurance for employees. Extending the tax payment deadline for businesses is a practical solution, he said. Doan also hopes the Government will soon reduce taxes for businesses so that they can overcome difficulties this year.

In addition to the tax payment deadline extension, the Government agreed with the proposal by the Ministry of Finance on the 2% reduction of the value-added tax rate for all goods and services subject to the tax rate of 10% along with a 20% cut in the percentage of goods for VAT calculation for business establishments, including business households and individuals. With this reduction, the Ministry of Finance forecasts that the state budget revenue will reduce by 35 trillion USD (1.49 billion USD).

Dao Phan Long, Chairman of the Vietnam Association of Mechanical Enterprises (VAMI), said that the business community highly appreciates the Government’s support policies.

Extending tax and land rent payment time is like offering businesses a preferential loan with a 0% interest rate, he said.

According to Dau Anh Tuan, Deputy General Secretary, Head of the Legal Department of the Vietnam Chamber of Commerce and Industry (VCCI), in the current difficult context, the 2% value-added tax reduction policy is considered fair policy between the state and enterprises and between enterprises.

The use of tax tools to stimulate domestic consumption is necessary, and the value-added tax reduction is said the most effective, Tuan said.

When reducing taxes and fees, businesses will have more room to keep or reduce product costs, he said, adding that businesses and people expect the support policies will be approved and take effect soon./.