Reducing VAT helps increase aggregate demand and control inflation

Ministry of Finance Propose the Government to allow further reduction value added tax 2% for some groups of essential goods and services and expanding the scope of this incentive. This information is very useful for consumers, especially mothers. This can be seen as a 2% discount on the bill for essential items such as washing machines, microwaves, etc.

The proposed application period is 1.5 years instead of the 6-month cycle as in previous VAT reductions. Therefore, this policy contributes to stimulating consumption, supporting people and businesses, and promoting production and business.

Mr. Vu Duc Minh (Cau Giay District, Hanoi) who often goes shopping said that although the 2% reduction in value added tax for each item is not large, with many items enjoying this policy, it has helped reduce his family's expenses by a significant amount.

"If I go to the supermarket and buy 1 million a week, I can save a lot in a month. From then on, I also want to go to the supermarket more to shop more," Minh shared.

Ms. Phan Thi Hoai Thuong - Director of WinMart Thang Long Supermarket said: "When we save 2% of the cost price from saving 2% of tax, we and our suppliers have a source of cost price to invest in more essential goods, with rich and diverse sources of goods."

In the short term, stimulating consumer demand is now considered one of the main drivers of Vietnam's economic growth.

Reducing VAT will help increase aggregate demand and control inflation. Illustration photo.

During the time when purchasing power shows signs of slowing down due to objective difficulties, continuing to reduce value added tax by 2% for more types of goods over a longer period of time will help increase aggregate demand and control inflation.

Mr. Mac Quoc Anh - Vice Chairman of the Hanoi Association of Small and Medium Enterprises commented: "Enterprises can reduce fixed costs and the fixed costs that businesses can reduce will be reinvested in production and business activities and reduce costs."

"Reducing VAT even more strongly is also an important policy for consumers, especially consumers in remote and disadvantaged areas, to have more motivation to shop," said Mr. Dau Anh Tuan - Deputy General Secretary of the Vietnam Federation of Commerce and Industry.

According to the Ministry of Finance's calculations, the reduction in value-added tax is expected to reduce state budget revenue in the last 6 months of this year and next year by about 122 trillion VND.

To compensate for the revenue shortfall due to the implementation of this policy, the Ministry will strengthen tax administrative procedure reform, promote digital transformation to better manage revenue from land, real estate transfers, e-commerce activities and business activities on digital platforms.

Source: https://baoquangninh.vn/giam-thue-vat-giup-gia-tang-tong-cau-va-kiem-soat-lam-phat-3351045.html