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The Ministry of Finance reacts to the proposal for a tax reduction for airlines

Treasury responds to airline tax break proposal - June 1

Airline planes at Tan Son Nhat Airport. (Photo: Vietnam+)

On April 29, the Ministry of Finance responded to proposals to reduce the VAT rate from 10% to 5% and exempt airlines from corporate income tax. Accordingly, this agency said that the decision-making authority on this issue rests with the National Assembly.

In addition, the Ministry of Finance also said that in the past period, facing the complicated developments of the COVID-19 epidemic, the Ministry has promptly supported the domestic manufacturing industry in general, as well as the aviation industry in particular, to actively investigate, report to the relevant authorities and guideline on tax, Issue dues, levies and land leases to support people and businesses to ease difficulties and promote production and business.

Regarding the aviation industry, according to the instructions of the Government, the Ministry of Finance has submitted the issuance of 3 resolutions to the Government and the Standing Committee of the National Assembly (Resolution No. 979/2020/UBTVQH14 of July 27, 2020 and Resolution No. Resolution No. 1148/ 2020/UBTVQH14 of December 21, 2020, Resolution No. 13/2021/UBTVQH15 of December 31, 2021, which provides for a reduction in the environmental protection tax rate for aviation fuel by 30% to 50% of this tax levied on jet fuel in 2022 is 50%.

According to the Ministry of Finance, against the background that the state budget remains difficult, but still has many important spending tasks to complete, additional problems and solutions to support the aviation industry need to be balanced. careful consideration and calculation to ensure harmony between the interests of business and the state.

Currently, the provisions of Decree No. 57/2020/ND-CP provide that the reduced import tax rate for aviation fuel is 7%. In addition, kerosene imported from some countries (which have signed a Free Trade Agreement (FTA) with Vietnam) is eligible for a lower preferential import tax rate (5%) based on the principle of reciprocity. On the other hand, airline companies also benefit from the 2% VAT rate reduction policy set out in Decision No. 43/2022/QH15.

In addition, in implementation of Government Resolution No. 11/NQ-CP, the Ministry of Finance has submitted a draft regulation to extend the deadline for paying taxes and lease payments on a number of subjects, including the aviation industry.

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