HCMC – The Vietnam Chamber of Commerce and Industry (VCCI) has proposed the six-month extension beyond the end of this year for settling all tax liabilities in 2023.
The VCCI made the above proposal in its feedback to the Ministry of Finance, contributing to the finalization of a draft decree on the extension of payments for value-added tax, corporate income tax, personal income tax and land rents that are due in 2023.
This policy was implemented in 2020, 2021 and 2022, leaving a positive impact on the country’s economy.
Decrees 41, 52 and 34 issued in 2020, 2021 and 2022, respectively, allowed businesses to defer their tax payments from the first to the second half of year. However, all tax liabilities must be settled by the end of December each year.
According to many enterprises, making all tax payments at the end of the year would cause cash flow problems as, at this time, they need short-term working capital to prepare orders in the new year and pay staff allowances.
Besides, most commercial banks request their clients to repay debts prior to December 31 as they need to comply with regulations on the credit growth limit.
The above reasons could explain the bottlenecks in the economy’s short-term cash flows in the year-end period when the supply of working capital could not meet the demand.
The 2023 draft decree still stipulates that the expiration date for fulfilling all tax liabilities is December 31, 2023.
The VCCI, therefore, proposed extending the time limits for all tax declarations and payments in 2023 by six months as the deferred tax payments will help adjust cash flows for the economy, preventing the imbalance of cash flow through different periods in the year, said the VCCI.