According to the delegates, the 2% VAT reduction should be applied to all goods to stimulate demand, and at the same time last one year instead of six months to promote efficiency.
The Government is submitting to the National Assembly a 2% reduction of VAT on goods and services subject to the 10% tax rate, except for some fields such as banking, real estate, securities and telecommunications. This policy was introduced in the context of Vietnam facing a deep drop in aggregate demand.
Sharing in the corridor of the National Assembly on the morning of May 27, many delegates said that this tax reduction policy should be extended to all goods and services in the current difficult context.
“It is necessary to reduce the VAT by 2% for all goods,” said Vu Tien Loc, chairman of the Vietnam Arbitration Center. According to him, all business opportunities are valuable, while businesses are in difficulty, this tax reduction will stimulate demand and solve market difficulties - the biggest bottleneck for businesses at the moment.
Mr. Vu Tien Loc, Chairman of the Vietnam Arbitration Center. Image: Hoang Phong
Chairman of the Association of Small and Medium Enterprises Nguyen Van Than agreed with the expansion of fields and industries that benefit from this policy to stimulate consumer demand.
"Opening more fields needs the Government to review and propose to the National Assembly, but in my opinion, we should focus on the manufacturing and export sectors, which are facing a lot of difficulties right now," he said.
The 2% VAT reduction will immediately affect people, stimulate consumption when they save on living costs, and help stimulate demand in the context of weak purchasing power. Manufacturing enterprises also benefit indirectly when the consumption of goods and services increases and the cost of input fuel is reduced because these items are only taxed at 8%.
Mr. Tran Hoang Ngan said that in this context, fiscal policy should be expanded to help the economy escape the decline, solve the problem of social security and employment.
According to him, all professions and fields are connected with each other. The financial market is an important market that contributes to solving all capital problems for businesses. “What is easy and convenient to do should be done. Therefore, it is necessary to reduce VAT for the mass, not to zone it, maybe even pull this tax reduction deeper, "Mr. Ngan stated.
Previously, according to the inspection report of the Finance and Budget Committee, some comments at this agency suggested considering the reduction of VAT for all groups of goods currently subject to the 10% tax rate, because currently the fields of production and business are facing difficulties. However, Mr. Hoang Van Cuong, Vice President of National Economics University, said that tax should only be reduced for the fields and groups of manufactured goods that are being deeply reduced, losing markets and orders.
"The fields of good business and high profit such as banks should not be reduced to ensure fair policies," shared Mr. Hoang Van Cuong.
Mr. Hoang Van Cuong, Vice President of National Economics University. Image: Hoang Phong
Present to the National Assembly this time, The government also plans to reduce VAT to 8% in 6 months.
According to Mr. Vu Tien Loc, this extension is to avoid the policy being jerky. Similarly, Vice President of National Economics University Hoang Van Cuong also acknowledged, extending tax reduction to 2024 so that the support period is long enough for businesses.
"We expect the economy to recover by the end of 2023, but whether the situation has improved since then, it is uncertain, so it is necessary to extend this policy to next year to be effective." he said.
However, according to current regulations, December 31 is the time to finalize taxes and develop next year's budget plan. In order to prolong this policy without interruption, Mr. Cuong said that this National Assembly's resolution should have open regulations. That is to allow the Government to reduce taxes until the end of 12, and if the context of the Government deems it necessary to continue, it should be reported to the National Assembly Standing Committee for decision, without having to wait until the next meeting.
It is expected that the National Assembly will discuss this tax reduction in the parliament on June 1 and vote on it at the end of the session.
