According to estimates by the General Department of Taxation, Ministry of Finance, people and businesses can save 47,000 billion VND in 2024 from reducing VAT by 2%.
From July 1, the 2% VAT reduction policy will continue to be extended until the end of this year. This is a policy that was just approved by the 7th session of the 15th National Assembly last weekend. Except for the finance, banking, securities, insurance, real estate, and metal sectors, all other industries currently subject to a 10% tax rate will be reduced to only 8%. This is the 4th time, since 2022, that the National Assembly and the Government have issued this policy to support people, businesses, and stimulate consumption.
Of all fiscal policies, reducing VAT is the most meaningful and impacts most people and businesses. Consumers will benefit first. 2% may not be much, but with larger bills, it is also significantly reduced. For example, a bill worth 16.3 million VND. Instead of paying 10% VAT of 1,630,000 VND, with 8%, you only have to pay 1,370,000 VND.
Importantly, this is not just a one-time reduction, but will be applied to all shopping trips by consumers until the end of this year. According to estimates from the General Department of Taxation, Ministry of Finance, people and businesses can save 47,000 billion VND in 2024 from the 2% VAT reduction.
Reducing VAT by 2% will help save a little money on bills, from a few thousand to a few tens of thousands of dong. The prices of goods will also decrease a little, consumers will buy more goods, and businesses will also increase sales.
"A 2% tax reduction seems small, but if you go out 5-7 times a month, it adds up to a lot, right?", said consumer Nguyen Thien Ly.
"2% means that every first million will be reduced by 20,000 VND. With a frequency of going to the supermarket twice a week, it is also a relatively large reduction for people. Every penny saved is a penny saved for working people like us," said consumer Pham Thi Hong Hanh.
Ms. Ngo Thi Minh Thu - Director of AEON Vietnam Supermarket General Merchandise Center, Hai Phong Le Chan branch said: "Reducing VAT by 2% helps many goods to be discounted. Therefore, we still maintain steady growth in production and business activities. Every year we have a growth rate of 10%. From January until now, we have maintained a growth rate of 110% compared to 2023".
Boosting production from 2% VAT reduction
If in 2021, the 2% VAT reduction policy has not been applied, the total retail sales of goods and consumer service revenue is estimated to reach over VND 4,789,000 billion. In 2022, after applying the 2% tax reduction, this figure has increased to VND 5,679,000 billion, an increase of 19%. In 2023, it will continue to increase to VND 6,231,000 billion. And in the first 6 months of this year, this figure is still growing by 8.6% over the same period.
The 2% VAT reduction has helped stimulate consumer spending. Over the past two years, not only consumers and businesses have benefited, but manufacturing enterprises have also received cash flow support from this policy to restore production and business after the Covid-19 pandemic.
Since July 2023, the company has benefited from a 2% reduction in VAT, which has enabled the company to purchase more than 50,000 tons of coal to support its production and business activities. As a result, production and business activities have grown.
Mr. Nguyen Huy Thanh - Deputy General Director of Hai Phong Thermal Power Joint Stock Company said: "This capital source contributes greatly to our ability to meet the payment for input materials. Therefore, in 2023, we overcame difficulties and achieved good business results. Revenue reached 11,500 billion, exceeding 8.4% compared to 2022. In the first 6 months of 2024, our revenue reached 6,300 billion. This shows that the Government's tax exemption and reduction policy is very timely, meaningful, and practical, contributing to supporting businesses to overcome the current difficult period."
"Although tax reduction will reduce revenue in the short term, in the long term it will positively affect the recovery and development of business production and business, thereby contributing revenue to the State budget. In the last 6 months of 2024, Hai Phong Tax Department will actively promote, disseminate, and support businesses and people in the area to know and benefit", said Mr. Vu Huy Khue - Deputy Director of Hai Phong City Tax Department.
The recovery of business production is evidenced by the GDP growth of 6.42% in the first 6 months of this year. Many industries have had impressive growth rates, such as: export of goods and services increased by 16.89%, industry increased by 7.54%, electricity production and distribution increased by 13.26%, construction increased by 7.34%, wholesale and retail increased by 7.34%.
A representative of the General Department of Taxation said that in order to help people and businesses promptly enjoy the 2% VAT reduction policy for the last 6 months of this year, this agency has just sent an urgent telegram to local tax departments, requesting them to proactively disseminate and guide taxpayers. Especially how to determine which items are reduced, avoiding the situation where businesses have to struggle to determine as before.
Ms. Pham Thi Minh Hien - Deputy Director of the Tax Policy Department, General Department of Taxation, Ministry of Finance said: "The Resolution of the National Assembly still inherits the old regulations in Resolution 43 of 2022. Therefore, the VAT reduction still applies to goods that are subject to a tax rate of 10%, excluding some goods that are not subject to the reduction. Determining the VAT reduction items also encountered difficulties in early 2022 when it was first implemented, but up to now, in general, we assess that there are no more problems in determining the tax reduction items."
The representative of the General Department of Taxation also added that the 2% VAT reduction policy has just been issued for the 4th time, and the tax payment extension policy has just been issued for the 5th time, implemented from Resolution 42 of the 15th National Assembly, are unprecedented fiscal policies, implemented over a long period of time. This shows the companionship of the National Assembly and the Government with the people and businesses in any circumstances, to fulfill the country's socio-economic development goals. True to the spirit of Resolution 93 of the Government on removing difficulties and promoting production and business activities for people and businesses.
According to VTV
Source: https://doanhnghiepvn.vn/kinh-te/nguoi-dan-doanh-nghiep-tiet-kiem-duoc-47-000-ty-dong-tu-giam-thue-vat/20240703084155280
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