Vietnam approves tax relief for businesses

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The government has issued a new resolution that approves a series of measures including tax cuts and lower interest rates in an attempt to stimulate the economy.

According to Resolution 13, small and medium enterprises and labor-intensive companies will be allowed to delay value-added tax payments for April, May and June by six months. Real estate developers are given up to 12 months to pay land use taxes.

The cost of land leases for 2012 will also be reduced by 50 percent, the resolution said.

The Finance Ministry will also seek approval from the National Assembly to reduce by 30 percent the corporate income tax payments for small and medium companies. Meanwhile, the State Bank of Vietnam has been ordered to bring down interest rates further.

The resolution did not say how much money the measures will cost. Previously, the government had estimated that the whole tax relief package would be worth VND29 trillion (US$1.4 billion).

Nearly 18,000 companies shut down or suspended operations in the first four months of the year. The economy expanded 4 percent in the first quarter, the slowest pace since 2009.

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