Economic goals drive National Assembly on

Getting enterprises back on their feet is a top priority for policy-makers

The 25-day session passed a resolution on tax solutions to handle difficulties for private enterprises in 2012, “which is one of enterprises’ most expected moves from the top law-making body,” said National Assembly Chairman Nguyen Sinh Hung.

The resolution, taking effect from June 21, includes a 30 per cent reduction in corporate income tax (CIT) in 2012 for small- and medium-sized enterprises (SMEs), except for SMEs operating in the lottery, property, securities, financing, banking and insurance sectors.

The initiative would also benefit labour-intensive enterprises in the agricultural, textile and garment, footwear and electrics sectors. The resolution, to be detailed by the government, also covers value added tax, personal income tax (PIT) and CIT exemptions in 2012 for households and individuals leasing boarding-houses to factory workers, students and providing food for workers, on the condition that these households and individuals must maintain rentals and prices for workers’ food as they were in late 2011.

The resolution also comprises PIT exemptions from July 1 to December 31 for individuals with incomes of VND5 million ($240.4) per month and VND60 million ($2,884) per year as carved in the existing Law on Personal Income Tax issued in November, 2007.

“Such tax priorities will help solve enterprises’ financial woes,” said National Assembly Deputy Chairwoman Nguyen Thi Kim Ngan. The Ministry of Planning and Investment (MPI) reported that in this year’s first five months, about 21,800 enterprises had ceased operation or dissolved, up 9.5 per cent against the same period last year.

Also, the credit growth in this year’s first five months was minus 0.83 per cent due to enterprises having no demand for loans, the MPI said. Deputy Prime Minister Nguyen Xuan Phuc said the government’s upcoming core task would be “removing enterprises’ difficulties to push up production and business. Meanwhile, the consistent policy of curbing inflation and stabilising the macroeconomy will continue to be implemented.”

Vietnam’s estimated economic growth rate in this year’s first half was 4.5 per cent, lower than the corresponding periods of 2011 (5.6 per cent) and 2010 (6 per cent). According to the State Bank, the government would try to augment credit grow by 2 per cent for each of this year’s remaining six months, so that total credit growth for the whole year would be 12-13 per cent.

Besides, the government would accelerate public spending worth total 180,000 trillion ($8.65 billion) for this year’s second half, with inflation already taken into account.