Proposal to exempt VAT on the purchase and sale of semi-processed agricultural, forestry and fishery products

VTV.vn - The Ministry of Finance is drafting a Law amending and supplementing a number of articles of the Law on Value Added Tax (VAT), including adding non-taxable subjects.

Accordingly, enterprises or cooperatives that purchase unprocessed or simply processed agricultural, forestry and fishery products (plants, planted forests, livestock, farmed and caught aquatic products) to resell to other enterprises or cooperatives do not have to declare and pay VAT, but are still entitled to deduct input VAT.

At the same time, products of crops, forests, livestock, aquaculture, and fishing that have not been processed into other products or have only undergone normal preliminary processing by organizations and individuals that produce, catch, and sell them, and at the import stage, will still be exempt from this tax.

Explaining this adjustment, the Ministry of Finance said that businesses must pay 5% input VAT on agricultural products purchased and sold at the commercial stage. Currently, the VAT collected and then refunded is for items where the majority of the production output is for export (such as catfish, pepper, coffee, etc.). This leads to a waste of time, money and capital stagnation for businesses while credit institutions do not disburse this tax when providing working capital, causing financial pressure and reducing business efficiency.

In addition, imported agricultural and aquatic products are not subject to VAT when imported into Vietnam. Therefore, this is an unjust discrimination between domestically produced agricultural and aquatic products and imported agricultural and aquatic products. A typical illustration of the consequences of this discrimination is that importers will not have to borrow from banks to pay VAT at the import stage. Meanwhile, exporting enterprises will have to borrow from banks to pay this tax to the State when purchasing domestically produced agricultural and aquatic products for export.

Source: https://vtv.vn/de-xuat-mien-vat-khi-mua-ban-san-pham-nong-lam-thuy-san-so-che-100251029155614172.htm