The Government submitted to the National Assembly to continue reducing value added tax until the end of 2023

Minister of Finance Ho Duc Phoc, authorized by the Prime Minister, presented the Proposal on continuing to implement the policy of reducing value added tax by 2% according to Resolution No. 43/2022/QH15 dated January 11, 2022.

Accordingly, in the face of complicated developments in the world and in the country, low GDP growth in the first quarter of 2023, and many difficulties for businesses... The Government's proposal to continue reducing value-added tax (also known as VAT) as applied in 2022 to support businesses and people is necessary.

Specifically, a 2% reduction in VAT applies to groups of goods and services currently subject to a tax rate of 10% (to 8%); except for the following groups of goods and services: Telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, goods and services subject to special consumption tax.

The application period is from July 1, 2023 to December 31, 2023. The Minister of Finance said that according to calculations, if applied in the last 6 months of the year, the expected reduction in state budget revenue is equivalent to about 24,000 billion VND (for the state budget revenue for the whole year of 2023, it is expected to decrease by 20,000 billion VND).

“Reducing value-added tax will contribute to reducing the cost of goods and services, thereby promoting production and business and creating more jobs for workers, contributing to stabilizing the macro- economy and economic recovery in 2023,” Minister Ho Duc Phoc emphasized.

Representing the agency examining this content, Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh also emphasized the need to issue a policy to reduce value-added tax to continue supporting the production and business sectors and people who have encountered many difficulties.

However, Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh also said that some opinions in the Finance and Budget Committee are still concerned that the policy of reducing value-added tax in the second half of 2023 will hardly be able to stimulate demand and promote growth as in 2022.

In addition, there are also suggestions to consider expanding the scope of subjects eligible for value added tax reduction by applying an 8% tax rate to all groups of goods currently subject to a 10% tax rate according to the Law on Value Added Tax because currently all production and business sectors are facing difficulties.

On the other hand, there are also opinions suggesting considering raising the value added tax reduction rate to 4% to ease people's burden and nurture revenue sources...

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