Agree to submit to the National Assembly a decision to continue reducing VAT by 2% until the end of 2024

Vice Chairman of the National Assembly Nguyen Duc Hai delivered a concluding speech on the discussion of the National Assembly Standing Committee.

Continue to reduce VAT to promote production and business activities

On the morning of June 13, the National Assembly Standing Committee discussed the draft Resolution of the National Assembly on reducing value added tax (VAT).

According to the Government's Proposal, the Government has submitted to the National Assembly for consideration and permission to continue implementing the policy of reducing VAT rates by 2% for a number of groups of goods and services currently applying a VAT rate of 10% in the last 6 months of 2024 (from July 1, 2024 to December 31, 2024) and assigned the Government to organize and implement.

Accordingly, the value added tax rate will be reduced by 2%, applied to groups of goods and services currently subject to 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, metal production and production of prefabricated metal products, mining industry (excluding coal mining), coke production, refined petroleum, production of chemicals and chemical products, goods and services subject to special consumption tax.

The goal is 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, and the economic restructuring plan for the period 2021 - 2025.

According to the Government, if the VAT reduction policy continues to be implemented for the last 6 months of the year, it is expected that the revenue will decrease by about VND 47,488 billion in 2024. The VAT reduction will reduce the state budget revenue but also stimulate production and promote production and business activities, thereby contributing to creating additional revenue for the state budget.

The estimated state budget revenue in 2024 is 1,701 trillion VND. Updated to the end of May, according to the State Treasury's report, the actual state budget revenue by May 31, 2024 was 909.3 trillion VND, equal to 53.5% of the estimate and an increase of 15% over the same period in 2023.

State budget revenue was quite good compared to the estimate and the growth compared to the same period reflected the impact of the positive economic recovery. Direct revenues from production and business activities (3 economic sectors) reached 54.7% of the estimate, up 14.3% over the same period; land use fee collection continued to improve, although the progress reached 33% of the estimate, it still increased by 92.8% over the same period.

To overcome and compensate for the impacts on the state budget revenue in the short term as well as ensure proactive management of the state budget estimate, the Government will direct the Ministry of Finance to coordinate with relevant ministries, branches and localities to focus on directing the implementation and effective implementation of tax laws; continue to reform and modernize the tax system, simplify tax administrative procedures; resolutely manage state budget revenue, focus on timely and effective implementation of groups of solutions for revenue management, combating revenue loss, transfer pricing, and tax evasion; at the same time, strictly manage state budget expenditures, increase expenditure savings (both investment and regular expenditures), review and cut spending tasks that are not really necessary, and are slow to be implemented after June 30, 2024; proactively use reserves, reserves and other legal resources to spend on prevention and control of natural disasters, epidemics and urgent tasks arising according to regulations, ensure budget balance at all levels, and keep the deficit level within the budget estimate decided by the National Assembly.

According to the Preliminary Review Report of the Finance and Budget Committee, the majority of opinions in the Standing Committee of the Finance and Budget Committee agreed with the proposal to continue to allow the application of the policy of reducing VAT rates by 2% in the form and scope as stated in Resolution No. 110/2023/QH15 of the National Assembly. In addition, there were also opinions that disagreed and suggested that the Government further assess the ability to achieve the goal of stimulating consumption when issuing and implementing this policy.

Include in the Resolution of the session for the National Assembly to consider and decide

Speaking at the meeting, members of the National Assembly Standing Committee all expressed their agreement on reducing VAT by 2% until the end of 2024 and included this content in the Joint Resolution of the 7th session. This is also the third time the National Assembly has decided to reduce VAT by 2%.

Vice Chairwoman of the National Assembly Nguyen Thi Thanh speaks.

Vice Chairwoman of the National Assembly Nguyen Thi Thanh said that the economy still has a lot of room for recovery. Therefore, tax reduction will help taxpayers have the motivation to produce, increase revenue for the coming years. At the same time, it will help the economy maintain production, increase consumer demand. The time frame proposed by the Government is only 6 months, not a long-term reduction.

National Assembly Chairman Tran Thanh Man said that the Politburo has agreed in principle to reduce value added tax. The National Assembly Chairman requested the Government to complete the submission, the Finance and Budget Committee to have an inspection report, the National Assembly Secretary General to have an official dispatch on the discussion in the group on this content, then synthesize the opinions of National Assembly deputies when explaining the General Resolution of the session.

National Assembly Chairman Tran Thanh Man speaks.

Concluding this content, Vice Chairman of the National Assembly Nguyen Duc Hai emphasized that the National Assembly Standing Committee agreed to submit to the National Assembly for consideration and decision on reducing value-added tax according to the Government's proposal and requested the Government to absorb the opinions of the National Assembly Standing Committee and the opinions of the examining agency to complete the draft Resolution, increasing the persuasiveness of reducing value-added tax.

The National Assembly Standing Committee also requested the Government to learn from experience in presenting contents under the authority of the National Assembly during the session in violation of regulations, avoiding having to adjust the session agenda and the National Assembly agencies having very little time to research and examine. Learn from experience in forecasting policy situations.

Propose that the Government organize the implementation of policies to ensure goals and time, without any difficulties or obstacles during the implementation process. Take responsibility for managing and implementing revenue collection tasks, without affecting the 2024 state budget expenditure estimate. Continue to revise and supplement tax laws, fully institutionalize the policies of the Party and State, including value added tax.

"In particular, pay attention to the viewpoint of amending and supplementing tax laws based on market principles and international practices, improving the efficiency of tax management, applying reasonable tax rates, orienting and implementing tax increases according to a roadmap" - the Vice Chairman of the National Assembly stated.

The National Assembly Standing Committee requests the Government to urgently complete the draft resolution dossier for submission to the National Assembly and the reviewing agencies. Request the Finance and Budget Committee to officially review, clearly stating the viewpoint for submission to the National Assembly for consideration and discussion in groups within an appropriate time arranged by the National Assembly Office for consideration and decision and to include it as a content in the Resolution of the 7th session.

According to VTV

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