Proposal to continue reducing value added tax until the end of June 2025

Kinhtedothi - On the afternoon of November 28, at the working session of the 8th Session of the 15th National Assembly, authorized by the Prime Minister, Deputy Prime Minister and Minister of Finance Ho Duc Phoc presented to the National Assembly a Draft Resolution on reducing value added tax.

Stimulate production, promote production and business activities

According to the Deputy Prime Minister, the content submitted to the National Assembly this time has the same scope as the resolutions that have been issued, which is to reduce the value added tax rate by 2%, applied to groups of goods and services currently applying a tax rate of 10% (to 8%), except for the following groups of goods and services: telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, goods and services subject to special consumption tax.

Deputy Prime Minister Ho Duc Phoc presented the draft resolution to the National Assembly - Photo: Quochoi.vn

Regarding the impact of the policy, Deputy Prime Minister Ho Duc Phoc said that the expected reduction in state budget revenue in the first 6 months of 2025 is equivalent to about 26.1 trillion VND (about 4.35 trillion VND/month, of which the reduction in domestic revenue is about 2.85 trillion VND/month and the reduction in import revenue is about 1.5 trillion VND/month).

In 2024, the value added tax amount reduced according to Resolution No. 110/2023/QH15 and Resolution No. 142/2024/QH15 is estimated at about 49 trillion VND.

"Reducing value added tax has the effect of reducing state budget revenue but also has the effect of stimulating production and promoting business activities, thereby contributing to creating more revenue for the state budget," said the Deputy Prime Minister.

According to the Government's submission, the estimated state budget revenue in 2024 is 1,701 trillion VND. Updated to the end of November 14, the actual state budget revenue is 1,708.4 trillion VND (equal to 100.4% of the estimate and an increase of 18.3% over the same period in 2023).

Scene of the working session on the afternoon of November 28 - Photo: Quochoi.vn

Regarding the impact on people and businesses, the report stated that people will directly benefit from this policy. The 2% reduction in value added tax will directly contribute to reducing people's costs in consuming goods and services serving people's lives.

For businesses, a 2% reduction in value added tax will help reduce production costs and product prices; help businesses increase their competitiveness, increase consumption of goods and services, and help businesses expand production and business, contributing to creating more jobs for workers.

Narrowing the scope of application, step by step to stabilize tax policies

Presenting the report on the review of the Draft Resolution, Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh said that the majority of opinions in the National Assembly's Finance and Budget Committee agreed with the necessity of issuing the resolution.

However, there are some opinions that disagree with the continued application of the VAT reduction policy and argue that the VAT reduction policy has been issued and implemented since 2022 in the context of businesses and people facing many difficulties due to the Covid pandemic. The issuance and implementation of the VAT reduction policy should only be considered a temporary solution for a certain period of time to support people and businesses.

Chairman of the National Assembly's Finance and Budget Committee Le Quang Manh presented the report on the review of the draft resolution.

Now that the pandemic has ended for a long time, tax incentive policies issued to support businesses and people to overcome difficulties after the pandemic need to be reviewed to narrow the scope of application, gradually stabilizing the implementation of tax policies. Therefore, continuing to propose and implement policies to reduce value added tax is not really appropriate.

Regarding the form of policy issuance, the Review Committee proposed to continue applying the form of resolution on this content in the general resolution of the session, similar to the resolutions that have been issued.

The majority of opinions in the Committee agreed with the Government's proposal to continue allowing the policy to be applied from January 1, 2025 to June 30, 2025.

Source: https://kinhtedothi.vn/de-xuat-tiep-tuc-giam-thue-gia-tri-gia-tang-den-het-thang-6-2025.html