Discussing at the conference hall about reducing value-added tax (VAT) on the afternoon of November 20, delegate Nguyen Duy Thanh (Ca Mau delegation) agreed with the Government's proposal, because global trade is forecast to continue to be difficult due to geopolitical fluctuations and the risk of economic domination.
Therefore, economic growth in 2024 depends heavily on domestic consumption, while value-added tax has a direct impact on reducing the selling price of goods and services and increasing consumer demand.
"It is forecasted that the economy will continue to face difficulties in the coming time, requiring real support. We should consider extending VAT reduction for the whole year of 2024, instead of just reducing it for the first 6 months of 2024," Mr. Thanh analyzed.
Delegates also suggested that it is necessary to consider applying a common VAT rate to all goods and services that are closely related to each other. Discriminating against VAT subjects affects economic relations and creates inequality in the market.
He also proposed that the National Assembly consider continuing to reduce value-added tax for the entire year of 2024 - this is a feasible and effective solution in the support policy applied in recent years.
For businesses that have signed contracts with state agencies, the reduction of VAT from 10% to 8% will cause businesses to lose revenue. Delegates suggested that agencies should provide guidance so that businesses do not suffer losses.
Delegate Nguyen Duy Thanh, Ca Mau delegation (Photo: Quochoi.vn).
Contributing his opinion, delegate Nguyen Quang Huan (Binh Duong delegation) also said that it is necessary to carefully assess the impact of VAT reduction in order to have a long-term policy. The significance of VAT reduction directly affects people, helping to stimulate consumption, while businesses are also indirectly affected. People benefit directly from VAT reduction, but can also be indirectly harmed when budget revenue is not guaranteed, affecting the macro economy.
Delegate Huan said that it is necessary to assess whether reducing VAT will increase or decrease GDP. If the tax is reduced in the first 6 months of the year, it will take until the last 6 months of the year to show clear impacts. Therefore, specialized agencies need to evaluate carefully. If effective, implementing VAT reduction should have a long-term policy, lasting the whole year of 2024, or even continuously reducing VAT for 1 year or 2 years.
Delegate Nguyen Thi Viet Nga (Hai Duong delegation) agreed with the reduction of value-added tax in 2024, but it is necessary to clarify the impact of tax reduction on economic growth, as well as contributing to job creation for workers.
The report stated that the recent 2% VAT reduction policy has boosted domestic consumption demand and boosted production and business. However, the results are not clear.
Ms. Nga also suggested that it is necessary to more carefully evaluate the impact of tax reduction on local budgets. Is this the reason why some economic targets for 2023 are not completed?
Delegate Nguyen Thi Viet Nga, Hai Duong delegation (Photo: Quochoi.vn).
Explaining the delegates' opinions on the proposal to reduce value added tax for some subjects, Minister of Finance Ho Duc Phoc said that this proposal aims to reduce pressure on the State budget.
“Reducing VAT is just one of many measures and only has short-term effects, not long-term effects, so it is still necessary to implement long-term solutions to increase GDP growth,” said Mr. Phoc.
Mr. Phoc emphasized that the proposal to reduce value added tax only applies in the short term, because the tax affects the improvement of public financial capacity, to do so, the tax rate must be increased. Therefore, in the short term, reducing taxes to create conditions for businesses to overcome difficulties, then increasing tax rates - this is an inevitable trend, in parallel with that, other stimulus measures will be applied to promote GDP growth.
Regarding the opinions of some delegates who raised the issue of why the 2% VAT reduction is only applied for 6 months, and the tax reduction can be extended longer, according to the Minister, in addition to the VAT reduction policy, there are also long-term support policies such as corporate income tax and personal income tax, which will begin to be revised in 2025...
Therefore, in the short term, the proposal to reduce VAT by 2% for 6 months will help businesses overcome difficulties without having a heavy impact on the budget. Based on the actual implementation, a report will be submitted to the National Assembly for comments .
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