Circular No. 07 TC/CTN guides the implementation of the Ordinance dated June 23, 1980, of the Standing Committee of the National Assembly and Directive No. 202-TTg dated June 25, 1980, of the Prime Minister regarding amendments and supplements to certain points on the policy of industrial and commercial taxes and slaughter taxes.

CIRCULAR

Guidelines for the implementation of the Ordinance issued on June 23, 1980 by the Standing Committee of the National Assembly and Directive No. 202-TTg dated June 25, 1980 by the Prime Minister regarding amendments and supplements to certain points concerning the policy on commercial and industrial taxes and slaughter taxes.

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In implementing the Ordinance issued on June 23, 1980 by the Standing Committee of the National Assembly regarding amendments and supplements to certain articles concerning the policy on commercial and industrial taxes and slaughter taxes and Directive No. 202/TTg dated June 25, 1980 by the Prime Minister, the Ministry of Finance provides specific guidelines as follows:

I/ ADEQUATE UNDERSTANDING OF THE SPIRIT OF PARTY AND STATE POLICY TOWARDS COLLECTIVE AND INDIVIDUAL COMMERCIAL AND INDUSTRIAL ACTIVITIES AND THE SIGNIFICANCE OF AMENDMENTS AND SUPPLEMENTS ON THE POLICY OF COMMERCIAL AND INDUSTRIAL TAXES

During the transitional period towards socialism, especially at the initial stage when moving from small-scale production to large-scale socialist industrial production where industry has not yet developed sufficiently, collective and individual commercial and industrial activities hold a very important position. With abundant labor force, technical capabilities, skills, equipment, and tools available among the people, the industries, small-scale industries, handicrafts, transportation, construction, catering services, and commerce within the collective economic sector can exploit local resources and raw materials to produce goods, expand services, contribute to ensuring production and living needs of the population, increase exportable goods that state-owned enterprises cannot fully undertake. The requirement for state management is to recognize these great potentials and develop plans and measures to guide and assist in fully utilizing all capacities to produce more valuable products, encourage production development, expand business operations in accordance with national planning, aligning with the common interests of the country and the legitimate long-term interests of producers and traders.

Alongside positive aspects beneficial to the national economy, collective and individual commercial and industrial activities also have negative sides: due to not fully recognizing the common interests of society and not clearly seeing long-term benefits, such activities may pursue short-term or personal gains, leading to speculative behavior, smuggling, fake goods production, sabotage... To protect the interests of workers and socialism, the state must promptly identify, prevent, and limit harmful activities affecting national welfare. This is an indispensable requirement for state management and supervision.

Commercial and industrial tax is a law of the state, reflecting comprehensively the policy of the Party and the state towards collective and individual commercial and industrial activities. After basically completing the socialist transformation of individual commercial and industrial activities in the North and starting from early 1979 in the South, the state established a tax system for commercial and industrial activities as a basis for organizing state management and supervision over collective and individual commercial and industrial activities. Regarding structure, the commercial and industrial tax system includes five types of taxes (enterprise tax, enterprise income tax, commodity tax, trading tax, slaughter tax) applied to different objects and stages of value realization; regarding tax rates and tax tables, the commercial and industrial tax policy favors production, transportation, and construction industries over catering and trade industries; collective economy is favored over individual economy...

After a period of implementation in both the North and the South, the tax policy had positive effects, encouraging production, promoting collective business operations, contributing to market management and combating speculators, profiteers, monopolists... However, due to incorrect understanding of the Party and state's policies towards collective and individual commercial and industrial activities, many places did not pay attention to assisting and guiding these activities, causing difficulties and inconveniences for their operations; in other places, management was lax, allowing unregulated growth of collective and individual commercial and industrial activities, spontaneous increases in the number of people engaged in catering and trading, leading to resource and goods shortages, difficulties in market management, and significant tax losses. Facing new circumstances, the tax policy revealed some shortcomings limiting its effectiveness.

Implementing the Resolution of the Sixth Plenary Session of the Central Committee, the Standing Committee of the National Assembly issued the Ordinance amending and supplementing certain points concerning the policy on commercial and industrial taxes and slaughter taxes to make the policy compatible with the new situation, enhance its effectiveness in encouraging production development and proper business expansion; encourage everyone to fulfill their duties to the nation and respect the state management system; contribute to strengthening market management, limiting and preventing speculative activities, smuggling, fake goods production, and other illegal activities... harmful to the national economy.

The amendments and supplements to the policy according to the Ordinance issued on June 23, 1980 by the Standing Committee of the National Assembly are part of the overall state policy towards collective and individual commercial and industrial activities. During the study and organization of implementation of these amendments and supplements, provincial People's Committees and relevant sectors responsible must thoroughly understand the spirit and main content of the Party and state's policies, review and assess the implementation of the policy in each locality and throughout the sector, to develop measures and plans to strengthen organization and guidance to ensure strict compliance with the policy, effectively implement state management and supervision over collective and individual commercial and industrial activities.

II/ CLOSELY DIRECT AND MONITOR THE IMPLEMENTATION OF THE AMENDMENTS AND SUPPLEMENTS TO POLICIES ACCORDING TO THE ORDINANCE OF THE NATIONAL ASSEMBLY STANDING COMMITTEE AND THE DIRECTIVE OF THE PRIME MINISTER

The Ordinance of the National Assembly Standing Committee clearly sets out the contents of the amendments and supplements to policies, while the Directive of the Prime Minister provides specific guidance on their implementation. The Ministry of Finance advises relevant sectors and People's Committees of localities on certain specific points in the implementation as follows:

1/ Regarding the tax exemption quota: The tax exemption quota constitutes part of business income (revenue minus costs for raw materials and machinery) of collective or individual commercial and industrial producers, which is exempt from corporate income tax. Article 14 of the Commercial and Industrial Tax Regulation issued pursuant to Resolution No. 200-NQ/TVQH dated January 18, 1966 of the National Assembly Standing Committee stipulates the tax exemption quota for small-scale industrial workers, handicraft workers, construction workers, transport workers... at 19 to 38 dong per month. Now, given the changes in prices and living standards compared to before, to ensure that small-scale industrial and handicraft workers have comparable income levels with state-owned enterprise workers, the Ordinance dated June 23, 1980 of the National Assembly Standing Committee raises the tax exemption quota for small-scale industry, handicrafts, construction, transportation... to the average wage level of state-owned enterprise workers in the same sector. Along with raising the tax exemption quota for production workers, the tax exemption quota for service and catering industries, and commerce also increases accordingly (the service and catering industry quota is 10% lower than the small-scale industry and handicrafts quota, and the commerce quota is 20% lower than the small-scale industry and handicrafts quota).

According to the principle of calculating the tax exemption quota clearly stated in the Ordinance and the Directive guiding the implementation by the Prime Minister, People's Committees of provinces, cities, and centrally-administered municipalities shall base on the 1980 salary plan to determine the average basic wage of the four major sectors: state-owned industry, transportation, construction, agriculture, to serve as the basis for setting the tax exemption quota for small-scale industry, handicrafts, transportation, construction, agriculture... in the collective and individual sectors (if the average basic wage of state-owned industry is 60 dong, then the tax exemption quota for small-scale industry and handicrafts is 60 dong; if the average basic wage of state-owned transportation is 62 dong, then the tax exemption quota for collective or individual transportation is 62 dong...).

To ensure uniformity in principles nationwide, reasonable relations between regions, and alignment with specific conditions in each locality, and to differentiate between encouraged and non-encouraged sectors, People's Committees of provinces, cities, and centrally-administered municipalities shall base on the specific production and living conditions in large areas within their localities to examine the specific tax exemption quotas for each sector or region higher or lower than the general tax exemption quota of the locality: 5%, 10%, 15%. Sectors and places with higher tax exemption quotas are those involving arduous labor, facing many difficulties, and located in expensive living areas, requiring encouragement. Sectors with light labor, favorable conditions, and located in areas with low living expenses, not requiring encouragement, will have lower tax exemption quotas.

For the service and catering industry and commerce sectors, the tax exemption quota for small-scale industry and handicrafts in the locality shall be reduced by 10% for application to the service and catering industry, and by 20% for application to commerce.

After examining and determining the specific tax exemption quota to be applied in the locality, People's Committees of provinces, cities, and centrally-administered municipalities shall report to the Ministry of Finance (with attached calculation bases) for review of the relationship between localities before announcing implementation. The tax exemption quota determined as above shall be implemented from July 1, 1980. When there are changes in wages, the Ministry of Finance will guide the calculation of the tax exemption quota.

2/ Regarding the application of tax schedules according to Articles 16, 22, and 24 of the new version of the Commercial and Industrial Tax Regulation.

The abolition of the excess profit tax under full progressive rates and its replacement with a partial progressive tax rate schedule has the significance of encouraging collective and individual commercial and industrial entities to develop production confidently, expand business in the right direction, respect national management principles and systems, and enthusiastically fulfill their obligations to contribute to the country.

The requirement for directing and managing taxes is to absolutely avoid missing any business operations and accurately determine the revenue of each household to apply the state's tax policy, ensuring fairness and rationality in the policy, enhancing the role of taxation in serving state management and supervision over collective and individual commercial and industrial activities, participating in market management, limiting and preventing illegal business practices.

The revised tax schedules (new tax schedules) are to be uniformly implemented throughout the country, replacing Articles 3 and 4 of Decision No. 327/CP dated December 30, 1978 of the Council of Ministers currently in effect in the South.

To implement the provisions of the Ordinance of the National Assembly Standing Committee and the Directive of the Prime Minister, People's Committees of provinces, cities, and centrally-administered municipalities need to grasp and analyze the situation of collective and individual commercial and industrial activities in their localities, requirements for production and living conditions of the people, review directions and plans for developing and improving small-scale industry, handicrafts, transportation, construction... in each area... based on this to specifically determine which sectors need encouragement to engage in collective business, which sectors do not yet require it, and which sectors and where it is more beneficial to allow individual production development (for example: handicrafts, simple weaving).

For industries and places where decentralized and individual production is more advantageous, individual producers shall pay tax according to the corporate income tax rate for cooperatives without adding any percentage. For industries and places that require collective business but localities have not yet planned to mobilize people to engage in collective business, or where such industries can be organized into collective businesses but engaging in individual business does not cause harm, an additional 5% rate shall be applied. For industries and places where it is necessary and feasible to mobilize people to engage in collective business, the tax rate for individual households shall be increased by 10% over the calculated tax rate.

3. Regarding itinerant trade tax: Article 34 of the commercial and industrial tax regulations stipulates four levels of itinerant trade tax at 5%, 7%, 10%, and 12% collected from those who occasionally sell goods, with seasonal characteristics, small quantities, and not including farmers selling leftover agricultural products at markets within self-sufficient areas after fulfilling their state purchase obligations under bilateral contracts. Currently, in many localities, especially in southern provinces, due to weak state commerce, local People's Committees still allow some individuals to buy and transport goods between regions with relatively large quantities. To enhance management and control through taxation and serve the state's procurement of goods, the Ordinance has added a 15% tax rate for large-scale itinerant trade.

The basis for distinguishing between small and large-scale itinerant trade is the revenue combined with the structure of goods in a single transaction. To uniformly apply this across the country and based on the current situation of itinerant trade activities, the Ministry specifies as follows: A 15% itinerant trade tax rate shall be applied to transactions involving goods subject to a 10% itinerant trade tax with revenues of 4,000 dong or more, such as chickens, ducks, eggs, fish, piglets, various types of medicinal herbs purchased by the state, and goods subject to a 12% itinerant trade tax with revenues of 3,000 dong or more (such as decorative items, second-hand goods, permitted itinerant trade goods).

Below these revenue levels, the tax rates of 5%, 7%, 10%, or 12% shall be applied according to the type of goods.

Itinerant trade tax applies to occasional traders with seasonal characteristics. For professional traders who are not fixed (mobile trading) or combine both fixed and mobile trading, they must declare and register specifically and bear corporate and income taxes like other professional traders.

4. Regarding slaughter tax: To strengthen state management and control over livestock slaughtering, enhance the effectiveness of the slaughter tax to encourage livestock development, increase the weight of livestock leaving the farm, and promote state procurement and supply of meat, the Ordinance has revised the slaughter tax rate to suit the new situation, and the Prime Minister's Directive has specified the minimum and maximum weights for the entire country, along with specific cases eligible for exemption and reduction. The Ministry provides additional guidance on implementing the policy as follows:

- Regarding the specific weight for collecting slaughter tax in each locality. The People's Committee bases on the local livestock breeding situation and the minimum and maximum weights set by the Government to determine the slaughter tax weight to be assigned to districts, counties, and equivalent levels within five categories: 40, 45, 50, 55, and 60 kg.

The specific slaughter tax weight for each region must encourage high-weight livestock breeding and exiting the farm while considering areas with difficult breeding conditions. Therefore, in regions with advanced breeding skills, the exit weight should be higher but not exceed 60 kg per pig, and in regions with difficult breeding conditions, the exit weight should be lower but not less than 40 kg. Each province should only have one or two levels for regions with significant differences in breeding skills. Breeders and butchers exceeding the specified level in their region will not be subject to additional slaughter tax.

- Regarding calculating the slaughter tax per slaughtered animal: The tax amount for one slaughtered animal is the state-purchased price multiplied by the specific exit weight of pigs for each region. According to the current pricing policy, the state-purchased price is set according to different weight brackets of pigs: from 40 kg to below 60 kg at 4 dong/kg, from 60 kg to below 80 kg at 4.3 dong/kg, and 80 kg and above at 4.6 dong/kg. Additionally, the state-purchased price encourages regional differences.

Local People's Committees base on the state-purchased price and the specific exit weight for each region to direct the calculation of the specific tax amount per slaughtered pig.

- For cattle and buffalo, to protect plowing cattle and breeding cattle, it is necessary to strengthen management and control over their slaughtering. To simplify calculations, the Ministry sets three slaughter tax rates for cattle and buffalo at 35 dong, 40 dong, and 45 dong.

Provincial, city, and centrally-administered special zone People's Committees base on the local cattle and buffalo breeding situation to announce the tax rates for each type of cattle and buffalo in their locality. The tax rate setting must encourage cattle and buffalo breeding and limit the slaughtering of breeding cattle, plowing cattle, and young calves.

An important aspect in managing cattle and buffalo slaughtering is to prevent the excessive slaughtering of plowing cattle, breeding cattle, and young calves, combined with veterinary protection.

- Regarding exemptions and reductions - The Prime Minister's Directive clearly stipulates that the exempted and reduced subjects are farmers who have fulfilled their state meat sales obligations and non-agricultural individuals who have utilized all possibilities to breed and slaughter meat from their own breeding, with a tax reduction rate of 25%.

Provincial, city, and centrally-administered special zone People's Committees base on the specific local situation if there are necessary cases requiring exemption and reduction policies (such as for ethnic minorities in mountainous areas), then propose specific recommendations to the Ministry of Finance for the Government's consideration.

III/ STRENGTHENING THE ORGANIZATION AND DIRECTING OF INDUSTRIAL AND COMMERCIAL TAX WORK, MAXIMIZING THE EFFECTS OF TAX WORK TO SERVE THE MANAGEMENT AND CONTROL OF THE STATE OVER COLLECTIVE AND INDIVIDUAL INDUSTRIAL AND COMMERCIAL ACTIVITIES.

The Ordinance of the Standing Committee of the National Assembly was issued during the period when places were concentrating efforts to declare business registration according to Decision No. 119-CP and were strengthening the specialized tax organization system for industrial and commercial activities from central to grassroots levels according to Decision No. 120-CP of the Council of Ministers. Provincial People's Committees and municipalities directly under the Central Government must closely combine these tasks to maximize the positive effects of tax work, contributing to encouraging lawful production and business development, enhancing market management, limiting and preventing speculative activities, smuggling, sabotage, and counterfeit goods...

It is necessary to widely publicize and explain to the people the spirit and content of the industrial and commercial tax policy and its amendments and supplements so that everyone understands the State's policies towards collective and individual industrial and commercial activities, uphold the State's laws, encourage everyone to fulfill their obligations to contribute to the country, and participate in combating illegal business practices. On the other hand, it is necessary to strictly direct the declaration and registration of business operations to ensure a full and accurate grasp of the actual situation of collective and individual industrial and commercial activities; on this basis, organize and direct tax work closely aligned with specific conditions in each locality and sector.

This is a difficult and very complex task. Provincial People's Committees and municipalities directly under the Central Government must have plans to strengthen the organization and direction in areas with concentrated industrial and commercial activities and weak movements, ensuring that business registration and industrial and commercial tax management achieve good results.

MINISTRY||| REGARDING THE APPLICATION OF DANGEROUS SUBSIDIES AND COMMISSIONS IN THE FORM OF GOODS FOR STATE TREASURY OFFICERS WORKING IN DANGEROUS ENVIRONMENTSAT THE MINISTRY OF FINANCE
(D (Signed)

Hoang Anh