Amending the Law on Value Added Tax: Creating the most favorable conditions for businesses and people

Photo caption — Discussion scene at group 4. Photo: QH

Delegate Sung A Lenh, National Assembly Delegation of Lao Cai province, expressed his agreement and strong support for the amendment and supplement of a number of articles of the Law on Value Added Tax. The Government's submission to the National Assembly for consideration of amending the Law at this session is urgent and very necessary, with the aim of removing bottlenecks and obstacles arising from practice, especially to overcome the consequences of natural disasters and floods and support the recovery of production and business activities in the agricultural sector. Delegates support the Government's amendment plan on the principle of prioritizing the removal of difficulties for businesses; while ensuring fairness and consistency of policies.

Delegate Sung A Lenh agreed with the regulation that puts unprocessed agricultural, forestry, aquatic and livestock products at the commercial stage into the category of those not subject to value added tax calculation and payment. Therefore, this amendment directly addresses the pressure that money has on export enterprises by eliminating the requirement to advance tax and wait for tax refunds. This policy overcomes the discrimination between domestic and imported agricultural products, thereby improving the competitiveness of Vietnamese agricultural products.

Minister of Finance Nguyen Van Thang said that the Ministry of Finance is very receptive when proposing to the National Assembly to amend and supplement a number of articles of the Law on Value Added Tax at this Session because the Law will take effect in July 2025. The review agency has two streams of opinions, many of which suggest continuing to implement according to the provisions of the Law on Value Added Tax 2024.

However, the contents of the law, when issued, will affect all activities of purchasing agricultural, forestry and aquatic products in all regions across the country. Difficulties come from businesses and people.

Minister Nguyen Van Thang said that when amending the Law on Value Added Tax in 2024, this issue was raised but we were not bold enough. Admitting that this is the responsibility of the drafting agency, the Minister of Finance stated clearly. Many National Assembly deputies commented that in recent times, the largest agricultural and forestry corporations have expressed their opinions on this matter.

The 2008 Law on Value Added Tax stipulates that products of crops, forests, livestock, aquaculture, and fishing that have not been processed into other products or have only undergone normal preliminary processing by organizations and individuals that produce, catch, and import themselves are not subject to value added tax. If sold to other businesses or cooperatives at the commercial stage or to consumers, the final consumer is subject to the 5% tax rate. According to Minister Nguyen Van Thang, the above regulation leads to many businesses having to go through many stages to buy and sell invoices, leading to tax fraud.

To address this issue, in 2016, the National Assembly added a provision to the Law that allows businesses not to declare and pay output VAT, but to declare and deduct input VAT for obvious costs such as electricity, water, and transportation at the commercial stage; and when selling to consumers, they are still subject to the 5% tax rate. This provision still ensures the nature of VAT, but at the same time overcomes the situation of fraud in VAT refunds.

However, according to Minister Nguyen Van Thang, when the 2024 Law on Value Added Tax abolishes the above provision, it will lead to difficulties. Therefore, it is necessary to regulate this under the 2016 Law on Value Added Tax. Amending the provisions on tax refund conditions and including them in the Law on Tax Administration is appropriate.

Source: https://baotintuc.vn/thoi-su/sua-doi-luat-thue-gia-tri-gia-tang-tao-dieu-kien-thuan-loi-nhat-cho-doanh-nghiep-va-nguoi-dan-20251208140221438.htm