Value Added Tax Reduction Has Been Long Term

This proposal has a new point: the tax reduction period is three times longer than previous tax reductions, lasting from July 1, 2025 to the end of 2026 with an estimated revenue reduction of over 120,000 billion VND.

We have reduced value added tax (VAT) many times to stimulate consumption but hesitated, announcing a new reduction every six months and lasting only six months.

In terms of tax reduction, we also reduce taxes "all year round", the first six months of the year and then continue to the last six months of the year. But the way the reduction is announced is not satisfactory to many businesses, experts and consumers.

Because six months is not long enough for businesses to calculate their business plans and it is not known whether the tax reduction will continue in the next six months.

When businesses know the tax reduction roadmap clearly, they can stimulate purchasing power by reducing prices, consumers also know in advance that they will receive a tax reduction, can spend a little more, then the goal of tax reduction will be fully achieved.

The tax reduction was hesitantly reduced in many phases but lasted for a long time, causing some opinions to say that VAT reduction is no longer able to stimulate demand because it is "too familiar".

In the context of the need to stimulate higher consumption, to consolidate the domestic market to ensure the target of 8% growth or more, as a source of support in case the growth momentum from exports slows down, tax reduction measures for people to feel secure to spend more instead of saving still need attention and must be renewed. And the new thing about this VAT reduction, if approved, is the long reduction period.

An 18-month tax reduction, including six months of 2025 and the entire fiscal year 2026, is enough time for businesses to calculate and develop their business plans for the coming time.

Consumers can rest assured that if they continue to shop at supermarkets for the next 18 months, they will save 2% of their total bill. It took many years to be satisfied with the proposal to reduce VAT. That can be considered a lesson.

Lessons on the effectiveness of VAT reduction should also be taken into account when amending the Personal Income Tax Law. The objectives and context of amending the Personal Income Tax Law are not different from those of VAT reduction, but with higher requirements.

That is to restore fairness to taxpayers, such as family deductions must be reasonable and adjusted promptly according to price levels, deductions must not be equal but must harmonize income and prices in urban and rural areas, encourage individual investment...

The new Personal Income Tax Law will determine the quality of life, people's consumption trends, and economic growth rate for many years to come, so don't forget the lesson of hesitantly reducing VAT.

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T. TUYEN

Source: https://tuoitre.vn/giam-thue-gia-tri-gia-tang-da-dai-hoi-20250514075537165.htm