"Powering" domestic consumption with tax and capital policies

Market faces double challenge

On April 22, sharing at the conference on solutions to promote domestic market development and stimulate consumption, Mr. Phan Van Chinh, Deputy Director of the Department of Domestic Market Management and Development, Ministry of Industry and Trade , said that in the first months of 2025, the domestic goods market remained relatively stable when the supply of essential goods was guaranteed and prices did not fluctuate much. However, purchasing power has not shown any clear signs of a breakthrough. Specifically, total retail sales of goods and service revenue in the first quarter of 2025 reached more than 1.7 million billion VND, up 9.9% over the same period; if excluding the price factor, the actual increase was only about 7.5%, reflecting cautious consumer sentiment in the context of people's income not really recovering.

"Notably, the increase was mainly concentrated in essential consumer goods and food and beverage services, tourism, while groups such as means of transport, household appliances, and clothing only increased slightly. This clearly reflects people's caution in spending, especially when income is still affected by the global economic context," said Mr. Chinh.

According to Mr. Chinh, the domestic market is currently facing many new challenges. These include the global economic downturn, trade wars and fluctuations in foreign exchange rates, which have made the export market difficult, leading to a decline in income for a segment of the population. These factors indirectly slow down domestic consumption.

At the same time, consumer behavior is also changing dramatically. People are switching from offline to online shopping, requiring domestic businesses to quickly adapt to digital platforms. “However, many small and medium-sized enterprises still do not have enough investment capacity, both in terms of technology infrastructure and human resources to implement digital transformation. In addition, cross-border e-commerce is also growing strongly, consumers can easily buy goods directly from abroad through platforms such as Temu, Shein or TikTok Shop. Meanwhile, domestic goods still have difficulty accessing modern distribution systems due to high costs and cumbersome procedures,” Mr. Chinh said.

The domestic market is experiencing a decrease in purchasing power and needs to boost demand stimulation. (Photo: Tin Tuc Newspaper)

From a business perspective, a representative of WinCommerce, the operator of the WinMart supermarket system, said that the business aims to open 800 new points of sale in 2025, aiming for 8,000 points by 2029. However, to achieve this goal in the context of an unstable world economy and consumers tightening their spending, businesses are in dire need of practical support policies from the State.

Accordingly, the People's Committees of provinces and cities need to support businesses in accessing approved trade plans, and have mechanisms to attract investment in developing retail trade infrastructure, especially logistics systems in localities. A synchronous trade system from urban to rural areas will help domestic goods reach consumers more conveniently, thereby promoting domestic consumption.

In addition, businesses need to be exempted or have fees reduced, especially land rent and electricity costs reduced by 20-25% if they develop modern retail models in rural, mountainous and remote areas. Because policies to support businesses through tax policies, land rent... will help businesses expand their sales networks outside of large cities and develop the domestic market more strongly.

Pillar for economic development

According to Mr. Nguyen Anh Duc, Chairman of the Vietnam Retailers Association, developing the domestic market should be considered an important pillar in economic growth. To realize the target of 8% GDP growth in 2025, the trade - service - retail sector needs to grow by at least 12%. This is a challenging figure but also an opportunity to restructure the entire industry.

Mr. Nguyen Anh Duc, Chairman of Vietnam Retailers Association, spoke at the Conference. (Photo: Tin Tuc Newspaper)

Therefore, to develop the domestic market, Mr. Nguyen Anh Duc said that it is necessary to focus on three main groups of solutions: Increasing income and strengthening consumer confidence through macroeconomic stability policies; Supporting businesses in technological innovation, digital transformation and developing modern business models; Restructuring the supply chain, developing strong retail and e-commerce alliances to be competitive with foreign goods.

On the other hand, Mr. Nguyen Anh Duc said that in order for the Campaign "Vietnamese people prioritize using Vietnamese goods" to be effective in the new context, the authorities need to change their approach towards inspiration instead of just being administrative and sloganistic.

According to Mr. Duc, consumers today are increasingly demanding, so domestic products need to meet realistic expectations in terms of quality, aesthetics, price and especially be available at the right time and place to be chosen.

The representative of the Ministry of Industry and Trade acknowledged the proposals from businesses and said that they will synthesize the recommendations to submit to higher levels, and at the same time include them in a specific action plan, starting to be implemented in the second quarter of 2025. Priority solution groups include: Supporting domestic distribution businesses; expanding modern and traditional retail systems; developing logistics infrastructure; enhancing supply-demand connections between production areas and major consumer centers.

The representative of the Ministry of Industry and Trade emphasized that domestic consumption is not only an important support during difficult economic times, but also plays a role as a driving force for sustainable growth in the long term. When the international context is still volatile, strengthening the domestic market will help increase the resilience and self-reliance of the Vietnamese economy in the face of global "big waves".

According to Tin Tuc Newspaper
https://baotintuc.vn/kinh-te/tiep-suc-cho-tieu-dung-noi-dia-bang-chinh-sach-thue-va-von-20250422161024355.htm

Source: https://thoidai.com.vn/tiep-suc-cho-tieu-dung-noi-dia-bang-chinh-sach-thue-va-von-212896.html