MoF proposes to expand tax base

VCN – In the revised law project on VAT, the Ministry of Finance (MoF) proposes to narrow down entities that are not subject to VAT and those subject to 5%VAT to remove difficulties for domestic enterprises. In addition, MoF also suggests adding some entities that will be subject to VAT.
MoF proposes decree amendment to allow bond payment conversions MoF proposes decree amendment to allow bond payment conversions
MoF proposes extension to tax payment deadlines in 2023 MoF proposes extension to tax payment deadlines in 2023
MoF proposes support policies on taxes and fees in 2023 MoF proposes support policies on taxes and fees in 2023
MoF proposes to expand tax base
MoF proposes that products used for agricultural production are not subject to VAT. Illustrative photo: VNA

According to the MoF, the Ministry will amend and supplement regulations in Article 5 to narrow the entities not subject to VAT; revise Article 8 of the Law on VAT to narrow the 5% taxable entities.

Regarding the narrowing entities not subject to VAT, the MoF said that some agricultural and fishery producers (for example, fertilizers; agricultural machinery and equipment; offshore fishing vessels) not subject to VAT face difficulties because they are not allowed to declare and deduct input VAT on goods and services, and must include in product costs, causing the increase in the product price and the decrease in the profit. Thereby causing a disadvantage in competition with imported products of the same type. In addition, because the input VAT is not deducted, the current Law on VAT does not encourage enterprises to invest, purchase, repair and upgrade fixed assets to create high-quality products.

The MoF also said that the current regulations stipulate that public service groups (postal services, public telecommunications and universal internet, services to maintain zoos, flower gardens, parks, etc.) are not subject to VAT. However, globalization and socialization are widely developed, and many public service sectors are increasingly socialized.

Enterprises of all economic sectors have provided the groups mentioned above with public services. However, the regulation on socialized public services not subject to VAT is no longer appropriate because the input VAT of the investment capital put into service business will not be deducted or refunded. Therefore, according to the Ministry, to remove this shortcoming, revising to narrow the non-VAT subject to socialized public services is necessary.

For subjects of 5% tax, the Ministry of Finance said, referring to international experience (IMF statistics), the majority of countries (47.6% of countries) apply VAT schedule with one rate (excluding the tax rate of 0% for exported goods and services); 31.7% of the countries apply the VAT schedule with two rates and the rest apply more than two rates.

Most Asian states, especially ASEAN states, only apply one tax rate in addition to the 0% tax rate. Accordingly, to meet the international development trend and to achieve the goal of applying one VAT rate under the Tax System Reform Strategy, it is necessary to review to narrow 5% -VAT subjects, said the Ministry of Finance.

The current Law on VAT stipulates that several groups of public services (such as cultural activities, exhibitions, exercises and sports, art performances, film production, and import…) are subject to 5% VAT. However, these public services have been strongly socialized. Accordingly, it is necessary to amend the regulations on applying a preferential tax rate of 5% to socialized public services.

The Ministry of Finance said expanding this tax base will ensure a safe and sustainable national finance in restructuring the state budget and managing public debt under Resolution No. 07-NQ/TW and Resolution No. 23/2021/QH15. Furthermore, the expansion aims to apply a VAT rate according to the Tax System Reform Strategy by reducing the number of groups of goods and services that are not subject to VAT and subject to 5% VAT.

This proposal of the Ministry of Finance will also remove difficulties for domestic manufacturing enterprises, ensuring that domestically produced goods compete equally with imported goods of the same type. Furthermore, these regulations are completely in line with international practices, creating favourable conditions for enterprises to participate in international economic integration.

By Thuy Linh/Hoang Loan

Related News

Minister of Finance Ho Duc Phoc works with WB Country Director for Vietnam

Minister of Finance Ho Duc Phoc works with WB Country Director for Vietnam

VCN - Minister of Finance worked with the World Bank Country Director for Vietnam Carolyn Turk, who came to say goodbye at the end of her tenure.
Ho Chi Minh City Customs proposed to reduce VAT

Ho Chi Minh City Customs proposed to reduce VAT

VCN - Ho Chi Minh City Customs Department proposed that the Ministry of Finance advise the Government to apply a reduction in the Value Added Tax (VAT) rate of 2% for all groups of goods and services which currently subject to the 10% VAT rate, uniform at the stages of import, production and consumption.
Revenue from casino contributes about VND9,000 billion to the State budget

Revenue from casino contributes about VND9,000 billion to the State budget

VCN - The management of lottery and casino business activities is one of contents asked by National Assembly delegates to Minister of Finance at the question and answer session took place on the morning of March 18, within the framework of the 31st session of the National Assembly Standing Committee.
Effectively implement the State

Effectively implement the State's credit capital investments to attract borrowers

VCN – Motivated by over VND 200,000 billion of the State’s credit capital investment poured into the economy, key economic projects have been implemented and achieved positive results. Therefore, removal of bottlenecks and obstacles will create more attraction and promote the role of the State's credit capital investments.

Latest News

Corporate bond maturity in 2024 remains high: MoF

Corporate bond maturity in 2024 remains high: MoF

The volume of corporate bonds maturing in 2024, though lower than that in 2023, is till at a high level, mostly in industries with payment risks such as real estate and renewable energy, according to a report by the Ministry of Finance (MoF).
Support clearance procedures for imported gold for bidding

Support clearance procedures for imported gold for bidding

VCN - The State Bank (SBV) has sent a document to competent ministries and branches requesting coordination in implementing the Prime Minister's direction in gold market management.
The exchange rate will gradually cool down from the end of the second quarter of 2024, while interest rates will remain low

The exchange rate will gradually cool down from the end of the second quarter of 2024, while interest rates will remain low

VCN - According to forecasts, Vietnam's financial sector in 2024 will be more positive, with the exchange rate gradually cooling down from the end of the second quarter of 2024, while interest rates will remain low to promote growth.
Majority of credit institutions forecast profit growth in 2024

Majority of credit institutions forecast profit growth in 2024

A total of 86.2% of credit institutions expect their profit this year to grow compared to 2023, according to the latest survey of the State Bank of Vietnam (SBV).

More News

Central bank plans to auction gold bars on April 22

Central bank plans to auction gold bars on April 22

The State Bank of Vietnam (SBV) will auction SJC-branded gold bars on April 22, a representative of the central bank said on April 19.
Old loans must endure higher interest rates temporarily: central bank

Old loans must endure higher interest rates temporarily: central bank

The average lending interest rate for new loans by commercial banks is reported at around 6.4% per year, a decrease of 0.7 percentage point per year compared to the end of last year. However, borrowers with loans issued before the latest rate adjustment still must pay higher rates, according to the State Bank of Vietnam (SBV).
State-owned enterprises flourished

State-owned enterprises flourished

VCN - The production and business situation in the first quarter of 2024 of the state-owned enterprise sector continues to have many bright spots with many financial targets completed or exceeding the set plan. This is the premise for positive business results in the second quarter and the whole year 2024.
Forum discusses support for women-owned firms ​to join supply chains

Forum discusses support for women-owned firms ​to join supply chains

A forum on supporting women-owned businesses to join supply chains through sustainable development tools took place in Hanoi on April 17.
Ensure savings and prevent losses in disbursement of public investment

Ensure savings and prevent losses in disbursement of public investment

VCN - The practice of thrift and combating waste in the management and use of public investment is one of key tasks in the program of thrift practice and waste combat in 2024 of the Ministry of Finance.
Implementing unprecedented fiscal policies to actively support people and businesses

Implementing unprecedented fiscal policies to actively support people and businesses

VCN - Implementing fiscal policies to support the economy, the Ministry of Finance has advised and offered many unprecedented solutions to reduce taxes, fees and charges, thereby supporting people and businesses to overcome difficulties, restore production and business. According to assessments, in 2024 fiscal policy will continue to be a positive highlight for the economy.
Foreign investors net sell in Vietnamese market, banking sector attracts interest

Foreign investors net sell in Vietnamese market, banking sector attracts interest

According to BSC, foreign investors sold a net total of VNĐ11.55 trillion across all three exchanges in the first three months of 2024, equivalent to 50.62 per cent of the total net selling value in 2023. The selling pressure came from active funds and ETFs, resulting in a continued net withdrawal state and exerting pressure on the market.
Banks record positive business indicators in Q1 2024

Banks record positive business indicators in Q1 2024

According to experts, the prosperity of the banking industry in the period came from many supporting factors, including favourable policies to credit growth.
The finance sector focuses on perfecting institutions, ensuring financial discipline, and budgetary rigor

The finance sector focuses on perfecting institutions, ensuring financial discipline, and budgetary rigor

VCN- In the document sent to the Ministry of Planning and Investment (MPI) regarding the implementation of Resolution No. 01/NQ-CP in the field of state finance and budget in March 2024, the Ministry of Finance stated that it actively implemented projects to build and improve institutions, ensuring the balance of the state budget and stability in the financial market and prices.
Read More

Your care

Latest Most read
Corporate bond maturity in 2024 remains high: MoF

Corporate bond maturity in 2024 remains high: MoF

The volume of corporate bonds maturing in 2024, though lower than that in 2023, is till at a high level, mostly in industries with payment risks such as real estate and renewable energy, according to a report by the Ministry of Finance (MoF).
Support clearance procedures for imported gold for bidding

Support clearance procedures for imported gold for bidding

The State Bank (SBV) has sent a document to competent ministries and branches requesting coordination in implementing the Prime Minister's direction in gold market management.
The exchange rate will gradually cool down from the end of the second quarter of 2024, while interest rates will remain low

The exchange rate will gradually cool down from the end of the second quarter of 2024, while interest rates will remain low

VCN - According to Vu Nhu Thang, Deputy Chairman in charge of NFSC, the economy in 2024 has more prospects than 2023 thanks to the strong promotion of public investment and specific policies to promote production activities, consumer economy, and investme
Majority of credit institutions forecast profit growth in 2024

Majority of credit institutions forecast profit growth in 2024

A total of 86.2% of credit institutions expect their profit this year to grow compared to 2023, according to the latest survey of the State Bank of Vietnam (SBV).
Central bank plans to auction gold bars on April 22

Central bank plans to auction gold bars on April 22

The State Bank of Vietnam (SBV) will auction SJC-branded gold bars on April 22, a representative of the central bank said on April 19.
Mobile Version