Proposal to reduce VAT on all goods and services.

Proposal to reduce VAT for all goods and services - Photo: QUANG DINH

In its response to the Ministry of Finance regarding the reduction of value-added tax (VAT) for the first six months of 2024, the Vietnam Federation of Commerce and Industry stated that Vietnam's macroeconomic situation in 2023 faced many difficulties and challenges.

Economic growth in 2023 is projected to be just over 5%. This difficult situation is expected to continue into early 2024 as the global economy has yet to recover and the domestic economy continues to face numerous challenges.

Therefore, further VAT reductions at this time are absolutely necessary, contributing to supporting businesses in regaining growth momentum and creating jobs.

In addition, the VAT reduction measures implemented in 2022 and 2023 have had many positive impacts on businesses and the economy, especially in boosting domestic consumption amidst difficulties in export orders.

However, according to the Vietnam Federation of Trade and Industry , businesses encountered quite a few difficulties in applying this policy, mainly stemming from the classification of goods that are subject to a 10% tax and those that are eligible for an 8% tax reduction.

Although the Government has issued Decree 15 of 2022 and Decree 44 of 2023 to guide implementation, in practice, there is still much confusion regarding the classification of goods and services into different tax rates.

In many cases, businesses consult the appendices of Decrees 15 and 44 but are hesitant to confirm whether their goods and services are subject to the 10% or 8% tax rate.

Some businesses have inquired with tax and customs authorities, but these agencies are hesitant to provide definitive answers for fear of making a mistake.

"Many businesses have had to hire additional accountants to adjust invoices and accounting records to reflect the new tax rates. Some businesses have reported situations where they negotiated and agreed with customers on quantity, quality, and price, but could not agree on the 8% or 10% tax rate, thus preventing them from signing contracts," the Vietnam Federation of Commerce and Industry emphasized.

For the reasons mentioned above, the Vietnam Federation of Trade and Industry proposes that the drafting agency consider reducing the VAT rate for all goods and services from 10% to 8%.

Agreeing with the proposal to reduce VAT on all goods and services from 10% to 8%, many economic experts, in discussions with Tuoi Tre Online, also suggested reducing VAT by 2% for the entire year of 2024 because people's lives and businesses are still facing significant difficulties.

Economist Vu Dinh Anh analyzed that reducing the VAT by 2% will benefit consumers as they will pay less tax. This policy will encourage consumers to buy more goods and services, thereby supporting businesses in selling more goods and services.

The Ministry of Finance is finalizing a draft resolution for the National Assembly. The proposal, which the ministry is seeking input from various ministries and central agencies, is to reduce VAT by 2% for certain groups of goods and services during the first six months of 2024. If this proposal is approved, the budget will experience a revenue reduction of approximately 25,000 billion VND.

According to TTO

Source: https://tuoitre.vn/de-xuat-giam-thue-vat-cho-tat-ca-hang-hoa-dich-vu-20231027105334908.htm

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