On the afternoon of November 28, under the direction of Vice Chairman of the National Assembly Nguyen Duc Hai, the National Assembly discussed in the hall the draft Resolution of the National Assembly on reducing value added tax.
Need to continue reducing VAT by 2% to suit the current economic context
The report on the National Assembly's draft Resolution on value-added tax (VAT) reduction presented by Deputy Prime Minister and Minister of Finance Ho Duc Phoc said that in recent times, many support solutions on taxes, fees, charges and land rents have been implemented with large support values and wide support scope, contributing to positive results in the recovery and development of the socio-economy as well as the activities of enterprises and people, thereby contributing back to the state budget.
However, in addition to positive factors, there are also many challenges and risks that may affect the implementation of the economic growth target for 2025 (the plan is 6.5 - 7%). Therefore, it requires additional solutions to support businesses, people and the economy to continue to maintain the recovery and growth momentum.
From the practices and experiences in implementing tax solutions commonly applied by countries; summarizing and evaluating the implementation of support solutions in the past time and from the results achieved from the 2% value added tax reduction policy, it is necessary to continue implementing this policy to stimulate consumption, in line with the current economic context, thereby promoting production and business activities to recover and develop soon to contribute back to the state budget as well as the economy to implement the 5-year socio-economic development plan 2021 - 2025, the annual socio-economic development plan, the economic restructuring plan for the period 2021 - 2025.
This Resolution adjusts the group of goods and services currently subject to a tax rate of 10%, except for the following groups of goods and services: Telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, etc.
The Resolution applies from January 1, 2025 to June 30, 2025.
Ensure expiration date, avoid policy renewal proposals
The audit report presented by Chairman of the Finance and Budget Committee Le Quang Manh stated that the majority of opinions in the Committee agreed with the necessity of issuing a Resolution to continue applying the policy of reducing value-added tax, contributing to reducing costs and selling prices of goods and services.
From there, it is possible to stimulate consumption, maintain jobs for workers, support people and businesses to continue to maintain recovery momentum and promote production and business activities to contribute back to the state budget and the economy.
Some opinions disagree with the continued application of the value-added tax reduction policy and argue that this policy has been issued and implemented since 2022 in the context of businesses and people facing many difficulties due to the Covid-19 pandemic; the issuance and implementation of the policy should only be considered a temporary solution for a certain period of time to support people and businesses.
There are opinions suggesting that it is necessary to deduct the revenue reduction due to policy application from the total budget revenue for localities because in the past, the implementation of policies without adjusting the revenue estimate has led to imbalances in budget revenue and expenditure in localities.
The Committee also agreed with the scope of policy application and the policy implementation period as proposed by the Government.
However, in order to move towards stability and predictability of the value-added tax policy system; at the same time, ensuring consistency with the expected implementation period stipulated in the draft Law on Value-Added Tax (amended), it is recommended that the Government ensure the termination period of the value-added tax reduction policy as presented at this Session, and not continue to propose extending the implementation period of the policy.
There are suggestions to apply the policy in 2025, ensuring that the policy is long enough to support production and business, avoiding proposals to extend the policy.
The majority of National Assembly deputies agreed to continue reducing value-added tax by 2% to help businesses and people overcome difficulties, stabilize production and business activities, and contribute to positive results in socio-economic development.
National Assembly Deputy Nguyen Truc Son (Ben Tre) said that with the economic growth target of over 7% in 2024, drastic solutions are needed to resolve difficulties and obstacles, and support businesses to maintain and expand production and business. And from the results of the policy of reducing value-added tax by 2% from 2022, which has brought clear benefits, it shows that continuing to reduce value-added tax by 2% is the right thing to do.
Some opinions say that consumption is one of the important pillars in 2025. Therefore, learning from previous experiences, this Resolution needs to be implemented for a longer period.
National Assembly Delegate Tran Hoang Ngan (Ho Chi Minh City) proposed that the Resolution's duration should be extended to 1 year instead of 6 months as proposed by the Government.
National Assembly Delegate Ha Sy Dong (Quang Tri) speaks. Photo: Ho Long
However, National Assembly Deputy Ha Sy Dong (Quang Tri) noted that reducing VAT is a short-term solution but there needs to be synchronous, long-term measures to improve domestic production capacity, improve the quality of goods and especially increase competitiveness in the international market. At the same time, the Government needs to develop and implement measures to increase budget revenue from sources other than VAT.
In addition, there should be measures to support small and medium enterprises so that they can make the most of this policy when accessing preferential capital to expand production and business...
Source: https://baotainguyenmoitruong.vn/ho-tro-doanh-nghiep-nguoi-dan-vuot-qua-kho-khan-on-dinh-san-xuat-383840.html
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