VCCI headquarters in downtown Hà Nội. VNA/VNS Photo

HÀ NỘI — The Vietnam Chamber of Commerce and Industry (VCCI) has recently proposed business tax duties should be postponed for six months for the year 2023.

The chamber said under the current tax regime all procedures must be done by the end of the year could be causing difficulties for businesses that are having issues with maintaining a healthy cash flow. 

The proposal was echoed by the Ministry of Finance, which also said deadline for business land-use tax and rent for the year 2023 should be extended to give businesses additional time and breathing space. The ministry said the government's top priority right now should be boosting economic recovery and production. 

The proposals were a continuation of a support package, enjoyed by the business sector in the last three years, which has been well-received among the business community. In effect, an extension on land-use tax and rent deadline could be considered a short-term, low-interest loan from the government, which was set to expire by the end of December 2023.

Business insiders and economists have long voiced concern over the timing of the deadline, which coincides with a time when businesses often find themselves in dire need of cash to ramp up production for the Lunar New Year and issue bonuses for employees. 

In addition, commercial banks typically refrain from granting short-term loans during said time, even asking borrowers to repay their loans before the end of December to serve their numerous credit growth targets. 

It has resulted in the end of December being a bottleneck for business cash flow, where demand soars but supply dwindles. 

Given the increase in the State's budget collection and slow disbursement of public-sector projects, economists have called for greater flexibility in using the available cash to give the business sector a temporary boost. 

According to VCCI, extending tax and rent deadlines for businesses should not have too much of a negative impact on the State's accounting book but the benefits are many, especially for small and medium-sized businesses. VNS