Individual consumers find it difficult to feel the VAT reduction policy
At the end of November 11, the National Assembly agreed to continue reducing value added tax (VAT) from 2023% to 10% and apply for half a year, from January 8, 1 to January 1. June 2024.
This is the third time the National Assembly has agreed to reduce VAT by 3%. Previously, the first time the National Assembly reduced taxes was from February 2, 1 to December 2, 2022. The second time is from July 31, 12 to December 2022, 2.
Individual consumers find it difficult to feel the VAT reduction policy. (Photo: Moit)
Recorded from reality, many people have learned about the 2% VAT reduction policy from the beginning of 2024, but they have not felt a big difference from this policy.
Talking to reporters from Journalist and Public Opinion Newspaper, Ms. Kim Loan, a resident living and working in Hanoi, shared that the 2% VAT reduction is relatively small and it is very difficult to feel this policy.
“I understand that the 2% VAT reduction policy will help people reduce their financial burden. However, as a normal consumer, I have not really felt how this policy impacts my life. For example, a 3kg bag of rice used to cost 120.000 VND, but now it's reduced to more than 3.000 VND, or a box of instant noodles only costs 4.000 - 5.000 VND," Ms. Loan said.
Not to mention, not all consumer goods are eligible for a 2% VAT reduction.
Agreeing with this opinion, Mr. Vo Thanh An, leader of a textile and garment business, said that the VAT reduction policy supports businesses better than normal individual consumers.
"For businesses, the VAT reduction policy has a huge impact, many raw material import costs are sharply reduced, this reduces pressure on businesses," this person said.
Reducing taxes means reducing the budget but it is necessary
Meanwhile, Dr. Vo Thi Van Khanh, Faculty of Business Administration, Academy of Finance, said that in Vietnam, the most common VAT rate for goods is 10%. That is, a common item businesses buy to sell has 10% VAT included. However, there are also some cases where special goods are only subject to a tax rate of 5%, or even 0%.
According to Ms. Khanh, a 2% reduction in VAT means a reduction in state budget revenue. Accordingly, with these two reductions in VAT from 10% to 8%, it is expected to reduce state budget revenue by about 80 billion VND.
“VAT is a tax that is widely applied to nearly all goods and services and has the widest influence on people's lives. Therefore, this tax reduction not only saves costs for people, stimulates consumption, but also promotes investment and removes difficulties for businesses due to the impact of the COVID-19 pandemic", Dr. Vo Thi Van Khanh said.
Reducing taxes means reducing the budget but it is necessary. (Photo: PO)
Also according to Ms. Khanh, in addition to the solutions that have been and are being implemented for 2023, such as extending the deadline for paying taxes and land rent; reduce land rent; Reducing environmental protection taxes on gasoline and oil products, continuing to reduce VAT as applied in 2022 to support businesses and people is necessary.
“This creates conditions to restore and promote production and business activities and create economic growth momentum in the current difficult context, directly and indirectly contributing to maintaining jobs and workers' income. and new revenue sources for the state budget," Ms. Khanh emphasized.
In fact, VAT is an indirect tax, which is included in the selling price of products, goods, and services, so when taxes are reduced, the prices of goods and services will decrease, thereby helping people buy them. more goods for the same amount of money.
In addition, the positive effects of reducing VAT from 10% to 8% also help businesses reduce the capital they spend to pay VAT when purchasing raw materials, fuel, materials and other inputs. a capital turnover cycle.
“That means businesses will save financial resources equivalent to about 2% (equal to the tax reduction rate) of the business's total purchasing revenue. This amount of money will be reinvested to promote production and business development," Ms. Khanh said.
To benefit from tax reduction, businesses need to determine the product code subject to VAT reduction; Adjust pre-printed prices on stamps, tickets, cards at tourist areas, checkpoints...
In short, the 2% reduction in VAT is and will help businesses and people benefit and the economy has more motivation for business recovery, demonstrating practical support and sharing. most directly and effectively of the state.
“At the same time, it is required that the Ministry of Finance and competent agencies continue to reform and modernize the tax system, simplify tax administrative procedures, enhance effective implementation of tax laws and housing revenue management. The country combats revenue loss, transfer pricing, tax evasion... to compensate for the shortfall in state budget revenue due to tax reduction...", Ms. Khanh added.
