Support about 19,488 trillion VND through VAT reduction in the first 5 months of 2024

The Ministry of Finance is seeking feedback on the draft Decree stipulating the policy of reducing value-added tax by 2% in the last six months of 2024, in accordance with the National Assembly's Resolution.

According to the Ministry of Finance, the 2% reduction in VAT under Resolution No. 110/2023/QH15 during the first five months of 2024 provided approximately VND 19,488 trillion in support to businesses and individuals. Excluding February, which included the Tet holiday, the average reduction in VAT on imports was approximately VND 1.5 trillion per month for the remaining months, and the projected reduction for domestic imports was approximately VND 2.5 trillion per month.

According to the socio-economic developments reported in the first five months of 2024 by the Ministry of Planning and Investment, several positive points were observed: GDP growth in the first quarter of 2024 is estimated at 5.66% compared to the same period last year, higher than the growth rate in the first quarter of 2020-2023; overall, in the first five months of the year, total import and export turnover reached US$305.53 billion, an increase of 16.6% compared to the same period last year, with exports increasing by 15.2% and imports increasing by 18.2%, resulting in a trade surplus of US$8.01 billion.

The Consumer Price Index (CPI) for the first five months of 2024 increased by 4.03% compared to the same period last year; core inflation increased by 2.78%; comparing the number of newly registered and reactivated businesses with the number of businesses withdrawing from the market, the total number of businesses increased by 1,500, averaging 300 businesses per month; total retail sales of goods and consumer service revenue for the first five months of 2024 increased by 8.7% compared to the same period last year. According to the State Treasury report, the actual state budget revenue collected as of May 31, 2024 was VND 909.3 trillion, equivalent to 53.5% of the projected budget and an increase of 15% compared to the same period in 2023.

Based on the results achieved above, it can be assessed that the 2% VAT reduction policy has contributed to reducing production costs. Businesses engaged in the production and sale of goods and services benefit from the VAT reduction, leading to lower selling prices for consumers. This, in turn, stimulates business production and consumption, contributes to job creation, and achieves the objectives set out when formulating the VAT reduction policy: stimulating consumer demand and promoting business development.

The Ministry of Finance stated that if the policy of reducing VAT by 2% in the last six months of 2024, as stipulated in the National Assembly 's Resolution, is implemented, the projected reduction in state budget revenue would be approximately 24 trillion VND (about 4 trillion VND per month, of which the reduction in domestic sales is expected to be 2.5 trillion VND per month and the reduction in import sales is about 1.5 trillion VND per month).

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Source: https://baolaocai.vn/ho-tro-khoang-19488-nghin-ty-dong-qua-giam-thue-gtgt-5-thang-dau-nam-2024-post385636.html