Consider increasing budget revenue by adjusting value added tax

Collecting value added tax is very effective.

On the afternoon of June 24, discussing at the National Assembly meeting on the draft Law on Value Added Tax (amended), delegate Hoang Van Cuong (Hanoi) expressed his agreement with amending the law to suit changes in the new situation.

Commenting on the draft content, the delegate said that this law amendment should not aim to increase state budget revenue. According to the delegate, statistics show that value added tax (VAT) collection always accounts for a fairly high proportion, while the rate of VAT mobilization in our country is among the highest compared to other countries in the region.

"The index to assess the level of tax mobilization is the tax collection productivity and VAT collection efficiency in Vietnam, both of which are high, showing that value added tax collection is very effective," delegate Cuong emphasized.

According to the delegate, VAT applies to consumers, not to producers. However, when the price of goods increases, the consumption of goods will decrease, thereby affecting producers, leading to a direct impact on the production sector.

The delegate pointed out that in order to recover the economy, in the past two years, we had to reduce taxes to stimulate production. Therefore, the delegate suggested that we should not increase budget revenue by adjusting value added tax. Instead, we can study property tax and environmental protection tax to increase budget revenue.

According to delegate Cuong, property tax is a tax that has the ability to mobilize a large amount of revenue for the budget, and at the same time has a very important regulatory role in the possession of assets.

Especially since we have just passed the Land Law, land prices are determined by the market, if we do not have this tax soon, it may push up property speculation and it will be a problem of consequence.

Regarding environmental protection tax, delegates said that this is also a tax that needs to be issued soon to regulate acts of pollution and environmental damage, while encouraging the green transition trend.

Delegate Tran Anh Tuan (Ho Chi Minh City) speaks. (Photo: DANG KHOA)

Appreciating the drafting committee for amending and supplementing many elaborate regulations, according to the national tax reform roadmap, however, delegate Tran Anh Tuan (Ho Chi Minh City) suggested considering adding some taxable groups as in the draft law.

According to delegate Tuan, we are currently implementing Resolution No. 43/2022/QH15 of the National Assembly on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program, which means implementing an expansionary fiscal policy in the direction of continuing to reduce taxes (2% tax reduction until the end of 2024).

According to the delegate, in the coming time, it is necessary to continue to have measures to stimulate consumption and production until the end of 2025 to ensure maintaining a good growth rate.

Delegates analyzed that amending the law to increase the tax rate from 0% to 5% as in the draft law for some goods that are inputs for production, thus businesses producing these goods will lose competitiveness, causing inflationary pressure on consumer goods, affecting people's lives.

Therefore, designing these two policies can easily cause policy conflicts when implementing an expansionary fiscal policy but introducing new taxable subjects, thereby reducing the ongoing expansionary fiscal policy.

Therefore, delegate Tuan said that it is necessary to design policies according to a roadmap, especially for agricultural products, it is necessary to recalculate reasonable tax policies, possibly including a 0% tax rate instead of 5% as in the draft law so that businesses can deduct taxes, but output food products are not under pressure to increase prices, while still implementing a better, more effective and efficient expansionary fiscal policy.

In addition, the delegate said that the draft law has not yet designed a roadmap for implementation. Moreover, from now until the end of 2025, we need to continue implementing expansionary fiscal policies, in which fiscal policies still have a lot of room.

Therefore, it is necessary to design in the direction of assigning the Government to include taxable subjects in accordance with the tax reform roadmap, but it is necessary to have an implementation time suitable to the actual situation and conditions.

It is necessary to review and amend regulations on non-taxable subjects.

Delegate Pham Van Hoa (Dong Thap) speaks. (Photo: DANG KHOA)

Also expressing agreement on the need to amend the law to address practical problems and meet the demands of a developing market economy, delegate Pham Van Hoa (Dong Thap) said that the taxable subjects listed in Article 5 of the draft law, including 26 items, are very specific, ensuring implementation. In particular, it is necessary to supplement regulations on some cases where imported goods are not subject to tax.

Regarding this issue, the delegate suggested considering because currently at some border gates, every day there are 4-5 million orders crossing our country's border that are exempt from tax because the value of each type of goods is small. If tax is calculated, each package is not worth much money but it will cost management personnel to collect, delaying time.

However, looking at the issue from another perspective, the delegate pointed out the fact that many countries in the world have abolished the tax exemption for imported goods of small value to create equality for domestically produced goods. From the above analysis, the delegate suggested that this issue should be considered in accordance with reality.

Regarding the conditions for deduction of 0% tax rate, delegates agreed to add stricter regulations to improve the effectiveness and efficiency in managing value-added tax refunds, avoiding the situation where businesses take advantage of loopholes in the law for personal gain, causing loss to the state budget.

Therefore, delegates suggested carefully identifying specific cases to stipulate in the law, and not assigning the Government to regulate clear issues.

Delegate Tran Thi Thanh Huong (An Giang) speaks. (Photo: DANG KHOA)

Also discussing non-taxable subjects, delegate Tran Thi Thanh Huong (An Giang) said that Article 5 of the draft law has amended and supplemented a number of provisions related to non-taxable subjects and many amended contents to ensure consistency of terms and concepts stipulated in specialized laws such as the Law on Cultivation, the Law on Animal Husbandry, the Law on Fisheries, the Law on Credit Institutions, etc.

According to delegates, it is necessary to review and amend regulations on non-taxable subjects in the direction of eliminating or adding some types of goods and services compared to current regulations to suit reality.

However, in addition to the cases where output VAT is not required to be paid but input VAT is deducted, there are currently a number of other cases such as organizations and individuals transferring investment projects for production, trading of goods, cooperatives...

Therefore, the delegate requested the drafting agency to explain and clarify the legal basis and assess the impact on determining the cases stipulated in Decree No. 209/2013/ND-CP that are not allowed to continue to deduct input VAT and output VAT without calculating VAT as determined in the draft law.

Ensuring flexibility and efficiency in the process of operating tax tools

Minister of Finance Ho Duc Phoc explained and clarified a number of issues raised by National Assembly deputies. (Photo: DANG KHOA)

Explaining some issues raised by National Assembly deputies at the discussion session, Finance Minister Ho Duc Phoc said that VAT has a very wide scope of regulation and is levied on most types of goods and services, so it will affect the interests of many manufacturers and businesses.

Therefore, the provisions in the draft need to ensure the development of production and trade, thereby providing unified regulations in accordance with the tax system reform strategy. Therefore, the drafting committee has closely researched and assessed the impact of each issue related to VAT policy, covering all revenue sources, in accordance with international practices.

The Minister said that according to the strategy by 2030, 16-17% of GDP must be mobilized into the budget, of which taxes and fees are 14-15% of GDP, and the domestic revenue rate must reach 86-87%.

Through the opinions of National Assembly delegates, the drafting agency will absorb and re-evaluate the impact of each policy package and the issues still under debate to ensure consistency when promulgating them at the next session.

Regarding the opinion of the delegates regarding the regulation that assigns the Government to regulate goods and services for households and individuals that are not subject to VAT, the Minister said that the provisions in the law must ensure that they are consistent with the world trend and that taxes are truly a tool to protect the economy and must adapt to the process of leading, operating and managing the economy, especially the macro economy. Therefore, decentralization to the Government is extremely important and ensures flexibility and efficiency in the operating process.

Regarding taxes on antiques, according to Minister Ho Duc Phoc, antiques imported by the state are not subject to tax, but organizations and individuals importing them for business purposes must pay tax.

Regarding the imposition of a 5% tax rate or the regulation of no tax on fertilizers, the Minister said that the drafting agency will re-evaluate the impact to present to the National Assembly at the session at the end of this year.

According to the Minister, currently, domestic fertilizer production is 73.3%, while imports are 26.7%, or about 4 million tons/year. Therefore, the 5% tax rate as proposed by the Government in the draft ensures no inequality for importing enterprises.

In addition, imposing a 5% tax on fertilizers so that businesses can get a tax refund will create resources for businesses to innovate technology, reduce product costs and develop sustainably. Thus, this can also have an impact on supply and demand, because if supply increases, prices will decrease, and if supply is low, prices will increase.

Regarding the expansionary fiscal policy, the Minister said that by the end of this year, the expansionary fiscal policy should be completed to focus on tightening, because the current world trend is to focus on enhancing the strength of public finance, ensuring social spending, building infrastructure, social security issues and other issues.

"To promote economic growth, tax rates must increase," the Minister of Finance stated.

Source: https://nhandan.vn/can-nhac-viec-tang-thu-ngan-sach-bang-dieu-chinh-thue-gia-tri-gia-tang-post815873.html