Businesses are tired of waiting for Decree 132 to be amended

However, after nearly 4 months, the amendment still has almost no progress.

In Resolution 105/NQ-CP dated July 15, 2023, the Prime Minister directed Ministries and branches have deployed a series of solutions to overcome difficulties for the business community. Notably, the Prime Minister has asked the Ministry of Finance to study and amend Decree 132/2020/ND-CP to remove obstacles for businesses regarding tax management regulations with related transactions.

The Government’s resolution clearly requires the Ministry of Finance to report to the Prime Minister in the fourth quarter of this year on the above amendment.

In August 2023, the Ministry of Finance announced the assignment of units under and under the Ministry to implement the Government’s resolution on tasks to solve difficulties for Production and business continue to promote reform of administrative procedures and tighten discipline. Accordingly, in the fourth quarter of 2023, the General Department of Taxation must complete the study and propose amendments to Decree No. 132/2020/ND-CP to remove obstacles for manufacturing enterprises related to tax management regulations for transactions. There is a link to submit to the Ministry of Finance to report to the Prime Minister.

Businesses are tired of waiting for Decree 132 to be amended

By mid-October, the General Department of Taxation (Ministry of Finance) issued a document asking for opinions from departments in the Ministry of Finance on the amendment. Notably in the above document, the Ministry of Finance plans to submit to the Prime Minister amendments and supplements to Decree 132 in… August 2024.

In fact, the above delay is causing many businesses to worry. settle. Previously, the Prime Minister’s drastic action was great news for the business community because for a long time, a series of capital channels for businesses were blocked, leading to the loss of “physical strength” for thousands of businesses. .

The consequences were enormous as many businesses had to fall into bankruptcy and workers lost their jobs, severely affecting their lives. The revised Resolution 132 is expected to be a great support for businesses when many reasonable and valid expenses of businesses will be recognized in accordance with reality, helping businesses have more resources.

From a macro perspective, a long-time expert in the financial industry affirmed that amending Decree 132 at the present time is extremely urgent due to the fact that many current regulations on tax management with associated transactions have revealed shortcomings. Inadequacies not consistent with reality.

Notable among these is the regulation to limit interest expenses to only 30% of EBITDA (total net profit from business activities in the period). plus loan interest expenses after deducting deposit interest and loan interest arising during the period plus depreciation expenses arising during the period).

This ratio is meaningful if interest expense exceeds 30 % of the total net profit of the enterprise, that excess amount is not included in the operating costs of the unit. This ratio is assessed to be inconsistent with reality in Vietnam – a developing economy. Businesses in many fields are in the stage of development and need capital to borrow while lending interest rates are high.

Specifically, cutting the ceiling at the above rate can cause businesses to fall into a situation where The situation of borrowing 10 VND but in reality only receiving 7-8 VND causes damage and affects the competitiveness of businesses.

In addition, with Decree 132, according to many businesses, a series of issues need to be addressed. Considered amendments such as transferring interest costs exceeding the control level to the next tax period or extending the time to transfer interest costs above the control level, currently 5 years, to a higher level…

Many business representatives believe that amending Decree 132 is more urgent but equally important is “must be right” and “must be successful”. Overall, the amendments must be made to remove difficulties for businesses so that they have more motivation to develop instead of creating difficulties that make businesses afraid of growing up.