Three months of VAT reduction have supported businesses and people with about 11,488 billion VND.

The report on the implementation results of the 2% reduction in value added tax rate according to Resolution No. 110/2023/QH15 of the National Assembly has been sent by the Government to National Assembly deputies.

From 2020 to 2023, the total value of solutions to exempt, reduce, and extend taxes, fees, charges, and land rents has reached about 700,000 billion VND.

In 2024, the 2% reduction in value-added tax (VAT) according to Resolution No. 110/2023/QH15 in the first 3 months of 2024 has supported businesses and people with about VND 11,488 billion.

The above information is stated in the report on the implementation results of the 2% reduction in value-added tax rate according to Resolution No. 110/2023/QH15 of the National Assembly, which has just been sent by the Government to the delegates.

At the sixth session, the National Assembly resolved to reduce the VAT rate by 2% for groups of goods and services specified in Point a, Section 1.1, Clause 1, Article 3 of Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program from January 1, 2024 to June 30, 2024. The Government was assigned to promptly and effectively implement the plan without affecting the State budget revenue and deficit estimates for 2024 according to the Resolution of the National Assembly, and report to the National Assembly on the implementation results at the 7th Session of the 15th National Assembly.

Implementing this regulation, the Government reported that in the 2020-2023 period, financial policy solutions to remove difficulties for production and business have been issued with the total value of solutions to exempt, reduce, and extend taxes, fees, charges and land rents (corporate income tax, personal income tax, VAT, special consumption tax, import tax, environmental protection tax, fees, charges and land rents) reaching about 700 trillion VND.

The estimated value of the solutions issued and implemented since the beginning of 2024 is about 68 trillion VND. Specifically, a 2% reduction in VAT of about 25 trillion VND. Reduction of environmental protection tax on gasoline, oil, and grease in 2024 according to Resolution No. 42/2023/UBTVQH15 dated December 18, 2023 of the National Assembly Standing Committee is about 42.5 trillion VND. Reduction of fees and charges of about 100 billion VND.

Regarding VAT, the report stated that the 2% reduction policy in 2022, the last 6 months of 2023 and the first 6 months of 2024 does not apply to all goods and services subject to the 10% tax rate, but excludes a number of groups of goods and services specifically named in Resolution No. 43/2022/QH15.

The Government's Decrees have detailed the list of goods and services that are not subject to the 2% VAT rate reduction policy according to the National Assembly's Resolutions.

However, during the implementation process, there are still some problems in determining: some goods and services are not eligible for VAT reduction; some goods and services are eligible for VAT reduction; the application of VAT reduction has not been unified at the import, production and consumption stages.

Such as chemical products, metals and prefabricated metal products, information products according to the law on information technology, ... due to the diverse and multifunctional nature of current goods; in many cases, goods are identical in name and function but different in composition, structure, and operating mechanism, so different tax policies must be applied but there is not enough basis to determine at the customs dossier inspection stage, leading to many difficulties for customs authorities and customs declarants in applying tax policies.

The list of goods excluded from the 2% VAT reduction policy issued with Decree No. 15/2022/ND-CP, Decree No. 44/2023/ND-CP, Decree No. 94/2023/ND-CP is stipulated in the List and content of the Vietnam Product Industry System issued with Decision No. 43/2018/QD-TTg dated November 1, 2018 of the Prime Minister. Goods in the information technology sector according to the law on information technology are not subject to VAT reduction according to the nature and purpose of use of the goods, which has led to difficulties for both the enforcement agencies (Customs, Tax) and enterprises, leading to inconsistency in implementation.

Regarding the results, according to the report, in 2022, the implementation of the VAT reduction policy under Resolution No. 43/2022/QH15 supported businesses and people with a total of about 51.4 trillion VND, contributing to stimulating increased domestic consumption, with total retail sales of goods and consumer service revenue in 2022 increasing by 19.8% compared to 2021.

In 2023, the 2% VAT reduction under Resolution No. 101/2023/QH15 in the last 6 months of 2023 has supported businesses and people with a total of about 23.4 trillion VND. Total retail sales of goods and consumer services revenue in the third quarter of 2023 increased 7.5% over the same period last year; Q4/2023 increased by 9.3% over the same period last year. In general, in 2023, total retail sales of goods and consumer service revenue increased by 9.6% over the previous year.

In 2024, the 2% VAT reduction according to Resolution No. 110/2023/QH15 in the first 3 months of 2024 has supported businesses and people with about VND 11,488 trillion (VAT at the import stage decreased by about VND 4,049 trillion, equivalent to about VND 1,349 trillion/month. At the domestic stage, VAT decreased by about VND 7,439 trillion, equivalent to about VND 2,480 billion/month).

In the first 3 months of 2024, total state budget revenue is estimated at 539.5 trillion VND, equal to 31.7% of the estimate, up 9.8% over the same period in 2023.

“It can be assessed that the 2% VAT reduction policy has contributed to reducing costs through businesses with production and trading activities of goods and services receiving VAT reduction, leading to a reduction in the selling price of goods and services for consumers, thereby promoting business production and business, people's consumption, contributing to creating more jobs for workers and achieving the set goal when building the VAT reduction policy, which is to stimulate consumption and promote production and business development,” the Government stated.

Source