Labor-intensive firms to benefit from tax payment delays

Laws - Enterprises employing more than 300 workers and cooperatives in certain sectors will have their 2011 tax payments delayed for one year, according to a prime ministerial decision.

Decision 54/2011/QD-TT inked by the Prime Minister last week following a Ministry of Finance proposal is aimed at helping enterprises cope with current tough market conditions such as high inflation and high interest rates.

In addition to labor-intensive businesses, cooperatives in sectors such as agriculture, forestry, aquaculture, textiles, footwear, electronic components, and infrastructure construction will not have to pay 2011 taxes until next year.

The taxes whose payment can be delayed from the end of next month should be roughly calculated every quarter and declared in the firm’s tax statements for 2011, excluding the tax on incomes from other activities than business and production.

Tax payments in Q1 will be rescheduled to end-April next year, those in Q2 to end-July 2012, those in Q3 to end-October 2012, and those in Q4 to end-March 2013.

Duong Thi Ninh, an official from the Finance Ministry, told the Daily that the ministry would issue a circular this week guiding the implementation of the decision for local tax agencies.

The ministry suggested tax payment delays totaling around VND6.7 trillion for small and medium enterprises (SME) and labor-intensive companies.

The ministry also suggested raising the personal income tax threshold to VND9 million per month. Those leasing out homes or providing babysitting services should have their income tax slashed by half while stock investors should be exempt from income tax. The total amount of tax breaks is estimated at VND4.2 trillion this year and VND2.2 trillion next year.