Employees working at Bumjin Electronics Vina Co., Ltd. (Photo: Thanh Dat)

Ineffective business operations, lack of capital, and difficulties in finding orders are said to be the main reasons for business dissolution.

The government issued Resolution No. 44/NQ-CP at the regular government meeting in March 2024 and at the online government conference with localities, which directed the Ministry of Finance to urgently consider and promulgate policies to reduce taxes and fees as in 2023 in order to continue removing difficulties for enterprises and supporting production and business activities.

The Ministry of Finance has recently submitted a proposal to the National Assembly for continuing the reduction of 2% value added tax (VAT) for several groups of goods and services that are currently subject to 10% VAT until the end of 2024. It also proposed the extension of VAT, corporate income tax, special consumption tax, and personal income tax, in addition to the reduction of some fees and land rent as conducted in 2023.

According to calculations by the Finance Ministry, the cut of VAT by 2% will result in a decrease of about 24 trillion VND for the state budget revenue in the last six months of the year, and a shrink of 47 trillion VND for the budget revenue for the entire 2024.

However, this policy is believed to be the most effective policy among the support packages for people, businesses, and the economy after the COVID-19 pandemic and it has received the appreciation of the entire society. The 2% VAT reduction until the end of 2024 will also help stimulate domestic consumption, reduce costs for businesses, and lower the costs of goods and services, thus ensuring the competitiveness and recovery of businesses in the current context.

As such, enterprises can increase profits, boost production and business, create growth momentum, and expand production scale to maintain jobs for workers while contributing to macroeconomic stability and economic recovery.

Economic experts believe that the implementation of support solutions regarding taxes and fees is essential. In addition to maintaining fiscal policies to facilitate capital flows for businesses, the government and the National Assembly need to continue to build more policies to promote disbursement of public investment capital, exempt and reduce taxes and fees, stimulate consumption and domestic tourism, and support economic recovery.

Promulgated policies should have specific instructions to completely overcome the overlap in implementation, and such policies should be carried out in a simple, quick, and effective manner. New policies must have a pervasive impact on the economy, creating favourable conditions for people and businesses to access, similar to the 2% VAT reduction policy, thereby strengthening confidence and creating more space for business development.

Synchronous and practical support policies are believed to help the business community adapt, proactively build development strategies, and grow stronger towards becoming a pillar of the national economy./.