According to a representative from the General Department of Tax, when implementing Decree 41, the agency propagated through many channels and most of the taxpayers were well aware of the policies. Under these policies businesses are able to categorize which group they belong to and if they are eligible to apply for a certain benefit or extension. However, the number of small and micro businesses applying is very low, because they have already filled tax obligations before the extension period from March 2020.
Electronics is a key export sector in Vietnam, and the Covid-19 pandemic has left many electronic businesses unable to cope with daily production. The input market of imported components and accessories, and the output market for export of finished products is now almost at a standstill. However, according to the Vietnam Electronic Industries Association (VEIA), many businesses are still concerned about regulations to support the extension of tax and land rent.
According to these enterprises, Decree 41 provides only general provisions and has many cumbersome procedures. Businesses also find the period of five months too short, as it is not enough time to recover production, especially during the current scenario of the Covid-19 pandemic. The world export market has not yet fully opened and not only are electronic enterprises affected but almost all business groups are in some turmoil as well.
Many business enterprises feel that the provisions of Decree 41 could be more of a liability than help when in applying for tax and land rent extension. Some businesses expressed concern about Article 4 in Decree 41, when stipulating that tax authorities do not have to notify taxpayers, but taxpayers themselves determine rates and are responsible for extensions under this decree.
According to VEIA, a number of electronic businesses have filed for registration for tax payment extension, then they will receive an extension of five months, without written approval from the agency. Some other businesses expressed concern that the tax authorities may find, after inspection, that the enterprise is not subject to an extension. At that time, enterprises will be forced to pay outstanding tax amounts, fines and even late payment interest.
In a document sent to the Ministry of Planning and Investment, the Dong Nai Business Association said that the provisions of Article 4 in Decree 41 states that when businesses submit their request and tax authorities do not send a confirmation, then they do not know how to fix this situation. If enterprises declare their assets incorrectly, later, when inspecting tax returns or auditing, enterprises are fined which makes them vulnerable to tax authorities.
According to Asso.Prof. Pham The Anh, Chief Economist at Institute for Economic and Policy Research (VEPR), policies to support enterprises need to be more flexible and more thought must be given to businesses that have been forced to shut operations in the current scenario.