HEPZA proposes 30 per cent slash on CIT to relieve burden on businesses

June 27, 2021 | 12:38
Ho Chi Minh City Export Processing Zone and Industrial Zones Authority (HEPZA) has made a number of proposals to the municipal People’s Committee to support businesses and workers during the COVID-19 pandemic, including reducing corporate income tax (CIT).
HEPZA proposes 30 per cent slash on CIT to relieve burden on businesses
HEPZA proposes 30 per cent CIT cut to support businesses through COVID-19

In 2020, the government issued a slew of relief measures to businesses and workers. HEPZA suggested maintaining supporting policies such as delaying the payment of union fees. In particular, the government was also proposed to reduce CIT in 2021 by 30 per cent for businesses with the total revenue of less than VND200 billion($8.7 million) each.

In addition, bussinesses were proposed to receive support in borrowing money to pay wages during the lockdown. HEPZA proposed increasing the terms of these loans to 12 months with zero interest rate. At the same time, businesses should be allowed to borrow from other credit institutions beside the Vietnam Bank for Social Policies. This will help ease wage pressure on bussinesses and provide some working capital to maintain production.

Furthermore, the authority emphasised the importance of simplifying administrative procedures to resolve issues for workers and businesses. HEPZA proposed further delay social insurance payment from 6 to 12 months for businesses to stabilise production and protect the rights of workers.

Another relief measure is to increase the allowances for employees whose labour contracts were terminated due to COVID-19. In case of temporary suspension of labour contracts or unpaid work, the city needs to shorten procedures for employees to receive the subsidy and survive the challenging time. Other measures include reducing electricity and water bills for worker hostels, dormitories, and accommodation so that these facilities can reduce prices for tenants.

At the same time, HEPZA proposed the State Bank of Vietnam to direct commercial banks and credit institutions to offer working capital loans for production and offer guarantees for purchase and sale contracts of raw materials with zero interest rate for businesses affected by the pandemic.

By Thanh Van

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional