HCMC Offers Tax and Interest Rate Cuts to Support Businesses | Ho Chi Minh City
Specifically, HCMC has proposed to reduce corporation tax by 50% in 2021 and to continue reducing corporation tax by 30% in 2022 and 2023 for companies with annual turnover of less than 200 billion VND; allow all costs related to pandemic prevention and business control, such as costs for Covid-19 testing and medical treatment (if applicable), food and living expenses, personal protective equipment, including masks, face shields and disinfectants, and hotel costs for isolation, to be deducted from corporate tax charges.
Regarding taxes for business households and individuals, the city proposed that they be exempt from personal income tax, value added tax, special tax on consumption, natural resource tax and environmental protection tax arising from production and business activities in the third and fourth quarters of 2021, in 2022 and 2023. At the same time, he proposed to exempt the personal income tax for workers with income from wages and salaries subject to level 1 and 2 tax.
HCMC also called for reducing the 50 percent value added tax rate (or percentage rate) for the last three months of 2021 and the years 2022 and 2023. At the same time, he suggested extending the tax payment deadline until the end of the second quarter of 2022 and does not impose any penalty for late tax declaration in 2021 due to the impact of social distancing following Prime Minister’s Directive No.16. Local tax authorities are actively performing in their power and do not require taxpayers to make a claim.
Regarding land rents, HCMC has proposed a 50% drop in land rents in 2021 for all businesses. As for tourism and tourism-related industries, land rent in 2021 will be reduced by 100%. Regarding interest rate support for businesses, HCMC proposed to the Prime Minister and Minister of Finance to add clauses ordering the State Bank of Vietnam to reduce interest rates on business loans. so that the interest rate on loans is not 2% higher than the interest rate on deposits; have policies to support loans for refinancing, working capital for production and business activities, guarantee payment of contracts for the purchase and sale of raw materials at zero percent interest rate for businesses difficult affected by the Covid-19 pandemic; simplify the procedures of support, preferential loans and extension of debt payment, to the project.