Removing economic bottlenecks by reducing VAT in all sectors

At the 5th Session of the 15th National Assembly , one of the issues that attracted the attention of delegates was that the Government was submitting to the National Assembly a proposal to reduce VAT from 10% to 8% for a number of goods and services. However, in the current difficult context, many delegates said that this tax reduction policy should be expanded to all goods and services instead of being limited to a number of industries and sectors.

Loosening fiscal policy to stimulate consumption, solve social security and employment issues is a concern of many National Assembly deputies. (Photo: quochoi.vn)

Many responses from tax cuts

According to many experts, the 2% reduction in VAT helps people save on spending and living expenses, has a psychological impact, helps stimulate demand, increase consumption, thereby promoting production and business activities to recover and develop soon to contribute back to the state budget as well as the economy .

In 2022, the reduction of VAT for only a few industries that have been applied will make it very complicated for businesses to declare and pay taxes. Some businesses and agencies (tax, customs, etc.) are even concerned that if they incorrectly identify the reduced items, they will risk being punished and disciplined for "violating" regulations.

The Finance and Budget Committee's audit report also noted that there were opinions from delegates suggesting considering expanding the scope of subjects eligible for value-added tax reduction by applying an 8% tax rate to all groups of goods because currently all production and business sectors are facing difficulties.

Delegate Tran Hoang Ngan, National Assembly Delegation of Ho Chi Minh City, expressed his agreement with the Government’s proposal to reduce value added tax by 2% because only an expansionary fiscal policy can help the economy escape recession. In the current difficult situation, we should loosen fiscal policy to solve the problem of social security and employment.

Delegate Tran Hoang Ngan said that VAT reduction should be applied to all groups of goods and services because the "close connection" between the current goods and services is very large. "Anything that is easy and convenient should be reduced for the masses, and VAT can even be reduced more deeply," Mr. Ngan emphasized.

Sharing the same view, delegate Hoang Van Cuong, National Assembly Delegation of Hanoi City, said that in 2022, the State budget revenue increased by 12.5%, also promptly and fully meeting the tasks of spending on investment for socio-economic development, so reducing VAT to stimulate consumption and support businesses is necessary to contribute to economic growth.

Delegate Tran Hoang Ngan said that industries and sectors are closely connected, so anything that is easy and convenient should have VAT reduced for consistency. (Photo: quochoi.vn)

Creating new momentum for the economy

Explaining the reason for the need to reduce VAT by 2% for all goods, Chairman of the Vietnam Arbitration Center Vu Tien Loc said that while businesses are facing difficulties, this tax reduction will stimulate demand and solve market difficulties. This is the biggest bottleneck that needs to be resolved for businesses at this time.

Delegate Truong Xuan Cu, National Assembly Delegation of Hanoi City, acknowledged: "Difficulties are a common problem of the current market, although the level of difficulty of each industry is different, so reducing the tax by 2% is a reasonable issue to also show that our policy is fair."

From the consumer perspective, National Assembly delegate Trinh Xuan An said that reducing VAT will create a driving force, a boost for people's consumption. "If it can be reduced, then any item that is already 10% will be reduced to 8%, we should not differentiate, exclude some items or that. That way there will be synchronization, creating comprehensiveness in fiscal policy."

Commenting on this issue, Secretary General of the National Assembly, Head of the National Assembly Office Bui Van Cuong said that it is necessary to expand the support objects in the direction of reducing 2% for goods and services with a VAT rate of 10%, not excluding some goods and services such as: telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, metals, prefabricated metal products, mineral products, excluding coal mining (grade coal, refined petroleum), chemical products and goods subject to special consumption tax. Because these are also difficult areas, need to stimulate consumption.

According to Nhan Dan newspaper

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