Agree to submit to the National Assembly a decision to continue reducing VAT by 2% until the end of 2024

Vice Chairman of the National Assembly Nguyen Duc Hai delivered concluding remarks on the discussion of the National Assembly Standing Committee.

Continue to reduce VAT to promote production and business activities

On the morning of June 13, the National Assembly Standing Committee discussed the draft Resolution of the National Assembly on reducing value added tax (VAT).

According to the Government 's submission, the Government has submitted to the National Assembly for consideration and approval the continuation of the policy to reduce the VAT rate by 2% for certain groups of goods and services currently subject to a 10% VAT rate for the last six months of 2024 (from July 1, 2024 to December 31, 2024), and has assigned the Government to organize and implement it.

Accordingly, the value-added tax rate will be reduced by 2% for groups of goods and services currently subject to a 10% tax rate (to 8%), except for the following groups of goods and services: telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, metal production and production of prefabricated metal products, mining (excluding coal mining), coke production, refined petroleum, chemical and chemical product production, and goods and services subject to excise tax.

The goal is to stimulate consumption, in line with the current economic context, thereby promoting production and business activities to recover and develop soon to contribute back to the state budget as well as the economy to implement the 5-year socio-economic development plan 2021 - 2025, the annual socio-economic development plan, and the economic restructuring plan for the period 2021 - 2025.

According to the government, if the VAT reduction policy continues for the last six months of the year, the projected revenue decrease for the whole year 2024 is approximately 47,488 trillion VND. While the VAT reduction will decrease state budget revenue, it will also stimulate production and boost business activities, thereby contributing to additional state budget revenue.

The estimated state budget revenue in 2024 is 1,701 trillion VND. Updated to the end of May, according to the State Treasury's report, the actual state budget revenue by May 31, 2024 was 909.3 trillion VND, equal to 53.5% of the estimate and an increase of 15% over the same period in 2023.

State budget revenue was quite good compared to the estimate and the growth compared to the same period reflected the impact of the positive economic recovery. Direct revenues from production and business activities (3 economic sectors) reached 54.7% of the estimate, up 14.3% over the same period; land use fee collection continued to improve, although the progress reached 33% of the estimate, it still increased by 92.8% over the same period.

To mitigate and compensate for short-term impacts on state budget revenue and ensure proactive management of the state budget, the Government will direct the Ministry of Finance to coordinate with relevant ministries, sectors, and localities to focus on effectively implementing tax laws; continue reforming and modernizing the tax system, simplifying tax administrative procedures; resolutely manage state budget revenue collection, focusing on timely and effective implementation of solutions to manage revenue collection, combat tax evasion, transfer pricing, and tax avoidance; simultaneously, strictly manage state budget expenditures, strengthen expenditure savings (both investment and recurrent expenditures), review and cut unnecessary expenditures and those delayed after June 30, 2024; proactively utilize contingency funds, reserves, and other legitimate resources to fund disaster prevention and control, disease control, and other urgent tasks as prescribed, ensuring budget balance at all levels and keeping the budget deficit within the limits approved by the National Assembly.

According to the Preliminary Review Report of the Finance and Budget Committee, the majority of opinions in the Standing Committee of the Finance and Budget Committee agreed with the proposal to continue to allow the application of the policy of reducing VAT rate by 2% in the form and scope as stated in Resolution No. 110/2023/QH15 of the National Assembly. In addition, there were also opinions that disagreed and suggested that the Government evaluate more carefully the ability to achieve the goal of stimulating consumption when issuing and implementing this policy.

Include in the Resolution of the session for the National Assembly to consider and decide

Speaking at the meeting, members of the National Assembly Standing Committee all expressed their agreement on reducing VAT by 2% until the end of 2024 and included this content in the Joint Resolution of the 7th session. This is also the third time the National Assembly has decided to reduce VAT by 2%.

Vice Chairwoman of the National Assembly Nguyen Thi Thanh speaks.

Vice Chairwoman of the National Assembly Nguyen Thi Thanh said that the economy still has a lot of room for recovery. Therefore, tax reduction will help taxpayers have the motivation to produce, increase revenue for the coming years. At the same time, it will help the economy maintain production and increase consumer demand. The time period proposed by the Government is only 6 months, not a long-term reduction.

National Assembly Chairman Tran Thanh Man said that the Politburo has agreed in principle on reducing value added tax. The National Assembly Chairman requested the Government to complete the submission, the Finance and Budget Committee to have an inspection report, the National Assembly Secretary General to have an official dispatch on the discussion in the group on this content, then synthesize the opinions of National Assembly deputies when explaining the General Resolution of the session.

National Assembly Chairman Tran Thanh Man speaks.

Concluding this discussion, Vice Chairman of the National Assembly Nguyen Duc Hai emphasized that the Standing Committee of the National Assembly unanimously agreed to submit the Government's proposal to the National Assembly for consideration and decision on reducing value-added tax, and requested the Government to incorporate the opinions of the Standing Committee of the National Assembly and the opinions of the verification agency to finalize the draft Resolution, increasing the persuasiveness of the value-added tax reduction.

The Standing Committee of the National Assembly also requested the Government to learn from the experience of submitting matters within the National Assembly's jurisdiction during sessions in violation of regulations, avoiding the need to adjust the session's agenda and leaving National Assembly bodies with very little time for research and review. Lessons should also be learned regarding forecasting policy trends.

Propose that the Government organize the implementation of policies to ensure targets and time, without any difficulties or problems during the implementation process. Take responsibility for managing and performing collection tasks, without affecting the 2024 state budget expenditure estimates. Continue to revise and supplement tax laws, fully institutionalize the policies of the Party and State, including value-added tax.

"In particular, pay attention to the viewpoint of amending and supplementing tax laws based on market principles and international practices, improving the efficiency of tax management, applying reasonable tax rates, and orienting and implementing tax increases according to a roadmap," the Vice Chairman of the National Assembly stated.

The National Assembly Standing Committee requests the Government to urgently complete the draft resolution dossier to submit to the National Assembly and the reviewing agencies. Request the Finance and Budget Committee to officially review, clearly stating the viewpoint to submit to the National Assembly for consideration and discussion in groups within an appropriate time arranged by the National Assembly Office for consideration and decision and to include it as a content in the Resolution of the 7th session.

According to VTV

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