The Ministry of Finance (MoF) on Tuesday issued a series of instructions for putting new Government tax policies into effect.

The Government announced the policies to reduce corporate tax and extend tax-payment deadlines last December.

Under MoF instruction, as of March 29 this year, small – and medium-sized enterprises (SMEs) will enjoy a corporate tax cut of 30 per cent for the fourth quarter of last year, and all of 2009. Companies have nine months to pay taxes.

SMEs are companies that have charter capital of under VND10 billion (US$595,000) and have less than 300 employees.

Businesses set up after January 1 this year – having an initial charter capital of less than VND10 billion – will gain from the new policies.

The corporate tax rate is now 25 per cent, 3 per cent lower than last year’s.

Under Tuesday’s instructions, the finance ministry will speed-up tax refunds owed to businesses. It will now only take between 8 and 30 days instead of 16 and 60 days for businesses to receive refunds. Tax autorities are required to issue 90 per cent of refunds within sevn days to export companies satisfying conditions. The remaining 10 er cent must be refunded by day 11.

High inflation throughout 2008 and the economic slowdown at the end of the year posed a great challenge to domestic businesses, especially SMEs.

According to Cao Sy Kiem, Chairman of the Viet Nam Association of Small – and Medium-sized Enterprises, at least 60 per cent of businesses were plunged into a period of stagnation and decline, 20 per cent of them were on the brink of bankruptcy. Only the remaining 20 per cent remain strong.

Economists said that SMEs would encounter even more difficulties in 2009 due to a shrink in the export market and price drops.

The country’s monthly export turnover has consecutively decreased since August. The decreasing trend in exports was forecast to continue in 2009 due to the ongoing financial crisis,despite an export turnover of nearly $63 billion in 2008, up 29.5 per cent over the previous year. — VNS

Source: http://vietnamnews.vnagency.com.vn