To practically support businesses to restore production, contribute to boosting consumption of goods, and promote socio-economic development, the National Assembly recently agreed to continue reducing 2% of value-added tax (VAT) on a number of goods and services, effective from July 1 to December 31, 2024.
Thanks to the 2% VAT reduction policy, Vinh Thinh Livestock and Dairy Processing Joint Stock Company (Vinh Tuong) has more financial resources to reinvest and improve production and business efficiency. Photo: Chu Kieu
Actively removing difficulties, promoting production and business activities of enterprises and people, the 2% VAT reduction policy, which has just been issued for the 4th time, is an unprecedented fiscal policy, implemented over a long period of time.
Accordingly, the scope of groups of goods and services subject to VAT reduction was determined when the National Assembly issued Resolution No. 43 and applied uniformly in Resolution No. 101 and Resolution No. 110. In particular, groups of goods and services currently subject to a tax rate of 10% will have their VAT reduced by 2% (to 8%).
Groups of goods and services that are not eligible for VAT reduction include telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, metal production and production of prefabricated metal products, mining (except coal mining), coke production, refined petroleum, production of chemicals and chemical products, goods and services subject to special consumption tax.
The 2% VAT reduction is applied to all organizations and individuals, regardless of the size of the enterprise. This policy helps reduce the cost of goods and services, thereby increasing purchasing power, promoting production and business, and creating more jobs for workers.
When VAT is reduced from 10% to 8%, production and business units are very excited, because it will reduce some production costs, reduce product prices and stimulate consumption in the last months of the year.
Ms. Ngo Thi Bich Thuy, Yun Vietnam Fashion Company Limited, Tho Tang town (Vinh Tuong) said: As an enterprise specializing in the production and trading of knitted fabrics, crocheted fabrics and other non-woven fabrics; processing garments for export to the US, Japan and South Korea markets, the cost of importing raw materials is quite large.
Therefore, reducing VAT by 2% helps the unit significantly reduce input costs. Currently, the company plans to reduce product prices with the expectation that purchasing power will increase and the unit will sign many new contracts with foreign partners.
On the other hand, reducing VAT by 2% means that the enterprise can reduce the amount of working capital from that 2% tax, the efficiency of capital use of the unit will be increased because it does not have to borrow, does not incur interest and has financial resources to invest or spend on other regular expenses.
Reducing VAT is considered an important motivation for businesses operating in the commercial sector, stimulating consumer demand in the market.
According to the representative of Go! Vinh Phuc , when applying the VAT reduction policy, businesses have many product codes including fresh food, cosmetics, clothing, household appliances... that are discounted and promoted. Because the current consumer psychology is still cautious in spending, stimulating consumption in the last months of the year with tax reduction and promotion policies will contribute to increasing people's shopping volume. Therefore, businesses operating in the commercial sector also directly benefit from the VAT reduction policy.
A clear proof of the 2% VAT reduction is that consumers directly benefit when shopping at supermarkets and shopping centers in the province, because up to half of the goods are on the discounted list thanks to this policy.
Mr. Nguyen Van Hung, Tich Son Ward (Vinh Yen) said: Reducing VAT is a practical policy, helping people reduce costs when shopping. For example, with a bill of 1 million VND when buying tax-reduced items, each person will receive a discount of 20 thousand VND.
Although the amount is not large, with many shopping trips, people can save a sum of money. That is for those with a stable and good income, and for freelance and seasonal workers with low income, saving about 100 thousand VND per month compared to the time before the VAT reduction policy also brings them new joy.
Ms. Nguyen Thi Dung, Dong Xuan Ward (Phuc Yen) confided: My husband and I are factory workers, with a total monthly income of more than 14 million VND. That amount of money must be used to pay for rent and raise 2 small children, so there is not much left each month. With a 2% reduction in VAT on some items, my family can save about 100,000 VND each month, even if it is a little, it helps the family somewhat ease the immediate difficulties.
Thanh An
Source: https://baovinhphuc.com.vn/Multimedia/Images/Id/114066/Doanh-nghiep-nguoi-tieu-dung-huong-loi-khi-giam-thue-VAT
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