Regarding the VAT reduction proposed by the Ministry of Finance, recently, the Vietnam Banking Association (VNBA) sent a document to the Ministry of Finance and the Vietnam Federation of Commerce and Industry (VCCI) to comment on the draft policy proposal to reduce value-added tax (VAT) by 2% in the first 6 months of 2024.
VNBA proposes that banks should be included in the preferential group for 2% VAT reduction in the first 6 months of 2024
Accordingly, VNBA's viewpoint is to agree with the proposed policy of reducing VAT by 2% in the first 6 months of 2024. At the same time, it is necessary to include this content in the report on the implementation of the state budget in 2023 and the state budget estimate in 2024 to submit to the National Assembly for a general resolution, instead of issuing a separate resolution on VAT reduction to ensure implementation progress.
Commenting on the draft, VNBA said that the operations of credit institutions are currently facing many difficulties. Bad debts and potentially risky debts tend to increase. The operating results of credit institutions in 2023 and 2024 are forecast to decline sharply compared to previous years, especially in small units.
Meanwhile, credit institutions must still ensure the implementation of interest rate support programs and service fee exemptions for businesses and people according to the Government's direction.
Therefore, to create conditions for credit institutions to have more resources to support businesses, invest in technology, and digital transformation to ensure security and safety in operations, VNBA proposes to add banks to the group of goods and services that are eligible for a 2% VAT rate reduction.
In mid-October, the Ministry of Finance proposed to reduce VAT by 2% in the first 6 months of 2024 for a number of groups of goods and services currently subject to a tax rate of 10% (to 8%). The Ministry of Finance has sent a document to solicit opinions from relevant ministries, branches, localities, and units.
In 2022, the National Assembly issued Resolution 43 on fiscal and monetary policies to support the Socio-Economic Recovery and Development Program, which proposed a solution to reduce VAT by 2% for a number of groups of goods and services subject to a VAT rate of 10% from February 1 to December 31, 2022.
In 2023, the National Assembly will continue to implement the VAT reduction policy according to Resolution 43 from July 1 to December 31, 2023 in Resolution 101 of the National Assembly on the 5th session of the 15th National Assembly.
According to the Ministry of Finance, in July, August and September this year, the 2% VAT reduction policy supported businesses and people with a total of about VND11,700 billion.
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