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The Ministry of Finance responds to the proposal of tax reduction for aviation enterprises

The Ministry of Finance responds to the proposal of tax reduction for aviation enterprises - 1

Airplanes of airlines at Tan Son Nhat airport. (Photo: Vietnam+)

On April 29, the Ministry of Finance responded to the proposal to reduce the value-added tax rate from 10% to 5% and exempt corporate income tax for airline businesses. Accordingly, this agency said that the authority to decide this issue belongs to the National Assembly.

In addition, the Ministry of Finance also said that in the past time, in order to promptly support the domestic manufacturing industries in general as well as the aviation industry in particular in the face of complicated developments of the COVID-19 epidemic, the ministry has actively research, report to competent authorities and issue policies on taxes, fees, charges, and land rent to support people and businesses in order to remove difficulties and promote production and business.

As for the aviation industry, following the direction of the Government, the Ministry of Finance has submitted to the Government and the National Assembly Standing Committee to issue 3 resolutions (Resolution No. 979/2020/UBTVQH14 dated July 27, 2020 and Resolution No. Resolution No. 1148/2020/UBTVQH14 dated December 21, 2020, Resolution No. 13/2021/UBTVQH15 dated December 31, 2021 stipulating a reduction of 30% to 50% of the environmental protection tax rate for jet fuel. Accordingly, the reduction of this tax on jet fuel applied in 2022 is 50%.

According to the Ministry of Finance, in the context that the State budget balance is still difficult but still has to ensure many important expenditure tasks, putting additional problems and solutions to support the aviation industry will have to be balanced. careful consideration and calculation, ensuring the harmony between the interests of enterprises and the State.

Currently, the provisions of Decree No. 57/2020/ND-CP stipulate that the preferential import tax rate for aviation fuel is 7%. In addition, jet fuel imported from some countries (which have signed a Free Trade Agreement (FTA) with Vietnam) is entitled to a lower preferential import tax rate (5%) on the basis of principle of reciprocity. On the other hand, aviation enterprises are also benefiting from the policy of reducing the value-added tax rate by 2% specified in Resolution No. 43/2022/QH15.

In addition, implementing Resolution No. 11/NQ-CP, the Ministry of Finance has also submitted to the Government a draft Decree on extending the deadline for paying taxes and land rents for a number of subjects, including the aviation industry.

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