Kinhtedothi - On the afternoon of November 26, with 407/451 National Assembly deputies participating in the vote in favor (accounting for 84.97% of the total number of National Assembly deputies), the National Assembly voted to pass the Law on Value Added Tax (amended).
Previously, presenting the Report on explanation, acceptance and revision of the draft Law on Value Added Tax (amended), Chairman of the Finance - Budget Committee Le Quang Manh said that regarding the tax rate (Article 9), many opinions agreed with the proposal to apply a tax rate of 5% on fertilizers.
Some opinions suggest keeping the current regulations; others suggest applying a tax rate of 0%, 1% or 2%. Some opinions suggest a comprehensive assessment of the impact of this regulation on farmers and agricultural and aquatic production. Some opinions are concerned about the possibility of businesses taking advantage of the policy, raising prices, affecting farmers.
Regarding the proposal to apply a 0% (or 1%, 2%) value-added tax rate to fertilizers, the National Assembly Standing Committee reported: If fertilizers are subject to a 0% tax rate, it will ensure benefits for both domestic fertilizer producers and importers because they will both be refunded the input value-added tax paid and will not have to pay output value-added tax.
However, in this case, the State will have to spend money every year to refund taxes to businesses. In addition to the disadvantageous factor for the State budget, applying a 0% tax rate to fertilizers is contrary to the principle and practice of value-added tax, which is that a 0% tax rate only applies to exported goods and services, not to domestic consumption. Applying it in this direction will break the neutrality of tax policy, create a bad precedent and be unfair to other manufacturing industries.
According to the explanation of the drafting agency, the regulation of an additional tax rate of 2% will require restructuring the Law on Value Added Tax such as designing a separate clause on tax rates, adding regulations on value added tax refunds for this case. The regulation of a tax rate of 1% or 2% for fertilizers is also not consistent with the goal of value added tax reform, which is to reduce the number of tax rates, not increase the number of tax rates compared to current regulations, as explained to the National Assembly delegates.
Based on the opinions of National Assembly deputies, in Report No. 1035/BC-UBTVQH15 dated October 28, 2024, the National Assembly Standing Committee explained and reported on the impact of changing fertilizer products from non-taxable to 5% taxable. The Government also issued Official Dispatch No. 692/CP-PL to supplement the explanation and provide specific supporting data.
To properly express the National Assembly's viewpoint in handling the above issue, the Chairman of the Finance and Budget Committee said that the General Secretary of the National Assembly has sent a request for National Assembly deputies' opinions on two options, one is to apply a 5% tax rate, the other is to keep it as current regulations.
Through the synthesis of opinions, it is shown that 72.67% of the total number of National Assembly deputies agreed with the proposal of the National Assembly Standing Committee and the Government to stipulate a tax rate of 5% for fertilizers, machinery, specialized equipment for agricultural production, and fishing vessels. Therefore, this content is shown in Clause 2, Article 9 of the Draft Law.
Regarding the threshold of revenue not subject to value added tax, the Chairman of the Finance and Budget Committee said that the current Law on Value Added Tax stipulates that the revenue not subject to value added tax is 100 million VND/year.
According to calculations by the Ministry of Finance, if the non-taxable revenue is 200 million VND/year, the state budget revenue will decrease by about 2,630 billion VND; if the non-taxable revenue is 300 million VND/year, the state budget revenue will decrease by about 6,383 billion VND.
Therefore, to ensure a reasonable increase in the non-taxable revenue threshold, relatively consistent with the average GDP and CPI growth rate from 2013 to present, the Draft Law stipulates a revenue threshold of VND 200 million/year as stated in the Draft Law.
Source: https://kinhtedothi.vn/quoc-hoi-chot-quy-dinh-doanh-thu-tu-200-trieu-dong-nam-tro-xuong-khong-phai-nop-thue-gia-tri-gia-tang.html
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