Proposal to expand the scope of value added tax reduction to stimulate consumption

The National Assembly listened to the presentation of the National Assembly's Draft Resolution on reducing value added tax. Photo: Quochoi.

On the morning of May 13, on behalf of the Prime Minister, Minister of Finance Nguyen Van Thang submitted to the National Assembly a draft resolution on value-added tax reduction.

This proposal, according to the Minister, aims to institutionalize the socio -economic development target for 2025 with a growth target of 8% or more, contributing to creating a solid foundation to achieve double-digit growth in the 2026 - 2030 period.

Notably, the VAT reduction plan in this draft Resolution has changed content compared to the provisions in previous National Assembly resolutions.

Specifically, the Minister said that value added tax includes goods and services subject to value added tax and not subject to value added tax (there are goods and services not subject to value added tax, there are exported goods and services subject to a tax rate of 0%, there are goods and services subject to a tax rate of 5% and there are goods and services subject to a tax rate of 10%), then only the tax will be reduced for goods and services subject to a tax rate of 10%.

In the group of goods and services subject to the 10% VAT rate, the subjects eligible for a 2% VAT rate reduction are expanded for goods and services serving production, business, tourism, and consumption to support increased purchasing power, stimulate domestic consumption and tourism, and special goods that contribute significantly to production and business. Such as information technology products and services, prefabricated metal products, coke, refined petroleum, chemical products, imported coal and coal sold in the commercial business stage, gasoline, and oil.

No reduction in value added tax on goods that are mineral resources, except for special goods that contribute significantly to production and business such as: Mineral products (except coal), metal products.

Similarly, goods and services subject to special consumption tax, except for gasoline, are also not subject to tax reduction.

The Government also proposed to keep services that are not eligible for value added tax reduction according to regulations in previous resolutions of the National Assembly such as: Telecommunications, financial activities, banking, securities, insurance, and real estate business.

In conclusion, the Government proposes to reduce the value added tax rate by 2% for 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, financial activities, banking, securities, insurance, real estate business, metal products, mining products (except coal), goods and services subject to special consumption tax (except gasoline). The application period is from July 1, 2025 to December 31, 2026.

After examination, the majority of opinions in the National Assembly's Economic and Financial Committee agreed with the necessity of issuing a Resolution to continue applying the policy of reducing value-added tax for the last 6 months of 2025 and the whole year of 2026 as proposed by the Government to support businesses to promote production and business, associated with maintaining macroeconomic stability.

In the context that the domestic economy is facing many difficulties and challenges; the world economy has many unpredictable fluctuations, the continued issuance of this policy can be seen as a measure aimed at domestic consumption to promote growth, contributing to achieving the set growth target of 8%, Chairman Phan Van Mai emphasized.

Agreeing with the Government's proposal to expand the scope of subjects eligible for value added tax reduction, the majority of opinions at the appraisal agency said that this is necessary to contribute to supporting businesses, stabilizing the macro environment to promote economic growth in the context of the current difficult economy.

However, the Government is requested to have effective solutions to ensure that difficulties and obstacles in implementing the policy are overcome because there are still goods and sectors that are excluded and not subject to tax reduction, ensuring that the target is easy to implement and creating convenience for taxpayers. At the same time, it is necessary to assess more carefully the impact on state budget revenue, ensuring that the implementation of the tax reduction policy is associated with the goal of medium-term fiscal stability and public debt safety, ensuring consistency with other tax policies such as environmental protection tax and special consumption tax, Mr. Mai commented.

Source: https://baodautu.vn/de-xuat-mo-rong-doi-tuong-giam-thue-gia-tri-gia-tang-de-kich-cau-tieu-dung-d283248.html