Will ask for National Assembly delegates' opinions on tax rates on fertilizers

Many opinions in the National Assembly Standing Committee agreed with the consultation of National Assembly deputies on changing fertilizer from non-taxable to 5% taxable.

Opening scene of the meeting. (Photo: Doan Tan/VNA)

Continuing the working program at the 39th Session, on the morning of November 14, the National Assembly Standing Committee gave opinions on explaining, accepting and revising the draft Law on Value Added Tax (amended).

The change of fertilizer from non-taxable to 5% taxable is a content that many National Assembly delegates discussed in the hall.

In addition, the Government has not yet agreed with the draft Law after receiving and adjusting some contents such as the level of revenue from sales of goods and services not subject to value added tax, the regulation that output value added tax is not required to be paid but input value added tax is deductible...

Ask for delegates' opinions on tax rates on fertilizers

Reporting on a number of issues with different opinions in the explanation, acceptance and revision of the draft Law on Value Added Tax (amended), Chairman of the Finance and Budget Committee Le Quang Manh said that the National Assembly Standing Committee agreed with the Government's proposal to change fertilizers, agricultural machinery and fishing vessels from non-taxable to 5% taxable as stated in the draft Law and the Explanation and Acceptance Report No. 1035/BC-UBTVQH15 submitted to the National Assembly.

At the discussion session in the Hall, many delegates spoke about this content, in which the majority of opinions agreed with the draft Law and the explanation of the National Assembly Standing Committee and the Government, some opinions suggested keeping it as the current regulations.

The Standing Committee of the Finance and Budget Committee has completed the explanation content, received the opinions of the National Assembly deputies, supplemented the data and information as requested by the National Assembly deputies, and shown in the draft Explanation and Acceptance Report. This content has been agreed by the Standing Committee of the National Assembly with the Government's proposal as shown in the draft Law of the Government.

However, at the discussion session in the Hall, there were still some National Assembly deputies who did not agree on this content, so the Standing Committee of the Finance and Budget Committee requested the National Assembly Standing Committee to give instructions on collecting opinions of National Assembly deputies.

Regarding this content, many opinions in the National Assembly Standing Committee agreed with consulting National Assembly deputies on changing fertilizer from non-taxable to 5% taxable.

National Assembly Chairman Tran Thanh Man delivers the opening speech. (Photo: Doan Tan/VNA)

Chairman of the Law Committee Hoang Thanh Tung said that although the two drafting and reviewing agencies had reached an agreement, this was an issue of concern to the delegates, so it was necessary to seek the opinions of the National Assembly delegates. To obtain opinions, the drafting agency needed to provide full information to the delegates on the market share of domestically produced and imported fertilizers and the impact of the policy, in order to create high consensus and unity.

Chairman of the Economic Committee Vu Hong Thanh said that there should be more options, because a delegate has submitted a document proposing a tax rate of 2%, the drafting agency should coordinate with the reviewing agency to handle this additional option.

Also agreeing with the plan to collect opinions from National Assembly deputies on this tax rate, the Vice Chairman of the National Assembly expressed his opinion that there should not be a vote on no tax, but there should be a tax of 0%, 2% or 5%, the important thing is to protect domestic fertilizer production. He analyzed that there are currently 3 types of subjects: domestic fertilizer production enterprises, import enterprises and farmers. The proportion of domestic fertilizer production enterprises is quite large, without tax, these enterprises do not receive tax refunds and therefore production costs are high, not competitive. Therefore, tax must be imposed to refund taxes to enterprises, protecting domestic production.

"If we ask for opinions, we suggest that even if we impose a tax and the tax rate is zero, we can still get a tax refund and protect domestic production. The 5% option will generate revenue, and the Government and the National Assembly will give that 5% back to farmers. If we impose a 5% tax and refund the tax to manufacturing enterprises, enterprises will have the conditions to boost production, reduce costs, and farmers will also benefit," said Vice Chairman of the National Assembly Nguyen Khac Dinh.

Concerns about the level of revenue from sales of goods and services not subject to value added tax

Regarding the level of revenue from sales of goods and services not subject to value added tax (Clause 25, Article 5), Chairman of the Finance and Budget Committee Le Quang Manh said that the draft Law, after being accepted and revised, has stipulated a threshold of VND 200 million/year. The Government proposes to keep this content as in the draft Law submitted at the 7th Session, thereby assigning the authority to the Government to stipulate the threshold level of annual revenue not subject to tax to ensure timely management in accordance with reality and the changing socio-economic context.

The Government believes that raising the threshold for non-taxable revenue is contrary to the policy of encouraging business households to switch to operating under the enterprise model. Opinions of National Assembly deputies discussed in the Hall did not propose that the Government regulate the level of revenue from the sale of goods and services not subject to value added tax; some opinions proposed raising this threshold to over 200 million VND, some opinions suggested a level of over or under 300 million VND or 400 million VND for the coming years.

On this issue, the Government's plan is not suitable because the Constitution stipulates that "state budget revenues and expenditures must be estimated and prescribed by law;" the threshold of non-taxable revenue is directly related to the rights and obligations of taxpayers (in this case, individuals and business households with low incomes in society - equivalent to a revenue of 8.3 million VND/month at the current level of 100 million VND/year). This content needs to be stipulated in the Law as it is currently. The increase to 200 million VND/year as in the draft Law (equivalent to 16.6 million VND/month) is a very low level, households with revenue below this threshold will find it difficult to switch to operating under the enterprise model.

The drafting agency agreed with the threshold of 200 million VND/year and removed the regulation on adjustment according to CPI. The majority of opinions of the Standing Committee of the Finance and Budget Committee also agreed with this handling plan. However, the drafting agency emphasized that this content needs to be consulted with the Government leaders to reach consensus. Therefore, the Standing Committee of the Finance and Budget Committee requested the Standing Committee of the National Assembly to give guidance on this content.

According to Chairman of the Law Committee Hoang Thanh Tung, the tax rate should be specified in the draft law. If necessary, the National Assembly Standing Committee can make adjustments, because the Standing Committee still meets monthly, or even weekly, to ensure transparency.

Deputy Minister of Finance Cao Anh Tuan said that the Prime Minister strongly suggested that the Government be given authority to regulate the threshold of annual revenue that is not subject to tax. From an implementation perspective, the Drafting Agency found that the revenue level of VND200 million is also appropriate.

On the same morning, the National Assembly Standing Committee gave opinions on explaining, accepting and revising the draft Law amending and supplementing a number of articles of the Law on Officers of the Vietnam People's Army./.

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