Reducing VAT is a multi-target policy with a positive impact on the economy

VCN - Talking to Customs Magazine, economic expert Dinh Trong Thinh said that continuing to apply the policy of reducing VAT from 10% to 8% in the first six months of 2024 is a necessary solution to stimulate domestic consumption, lowering product prices, reducing the consumer price index, and at the same time supporting businesses to continue the process of recovery and good development.
Strict control of VAT refund to avoid fraud and loss of budget Strict control of VAT refund to avoid fraud and loss of budget
Troubleshooting customs procedures and VAT policies for Korean enterprises Troubleshooting customs procedures and VAT policies for Korean enterprises
VAT proposed to reduce in the first half of 2024 VAT proposed to reduce in the first half of 2024
Economic expert Dinh Trong Thinh
Economic expert Dinh Trong Thinh

Dear Sir, Deputy Prime Minister Le Minh Khai has just agreed with the proposal of the Ministry of Finance to continue applying the policy of reducing VAT by 2% in the first half of 2024 for some types of goods. Could you please give your assessment of this proposal from the Ministry of Finance?

As we know, the world situation is very complicated. Inflation has decreased but not as expected, interest rates are high, and the recovery of the world economy is still very slow. This has affected import-export and Vietnam's economic activities, accordingly, import-export activities have many difficulties because international trade is declining compared to previous years.

In 2023, our economy will face many difficulties due to a significant decrease in export orders, while domestic consumption will not grow as expected, leading to many difficulties in production and business. Therefore, the proposal to continue applying the policy of reducing VAT from 10% to 8% in the first six months of 2024 is a necessary solution to both stimulate domestic consumption demand, lower product prices, and reduce costs. consumer price index while supporting businesses to continue the process of recovery and better development. In the context of the economy as well as businesses' production and business being extremely difficult today, we believe that the Ministry of Finance's proposal to continue reducing VAT starting from January 1, 2024, after the end of the 2023 VAT reduction policy, which is very reasonable.

In your opinion, when this policy is implemented in practice, how will it impact businesses, people and the economy?

As I said, reducing VAT will first have a positive impact on consumers, the price of goods on the market will decrease, the impact on the overall price level will decrease by about 1.7%.

Besides consumers, production forces also benefit from both ends. Accordingly, input prices of raw materials for production will decrease, capital costs will also decrease, thereby reducing production costs, businesses will have more profits or more resources to reduce selling prices as well as carry out other promoting activities. These are moves that can boost consumption. If products are produced and turned around quickly, businesses will benefit greatly. Obviously, reducing taxes will have an impact on reducing budget revenue, but we have been able to stimulate consumption demand as well as help businesses recover better through reducing input costs, thereby helping businesses benefit. better profits. Equally important, price cuts can help control the consumer price index. For example, in August and September, when preparing to enter the new school year, the price of goods on the market decreased, helping the consumer price index decrease, thereby helping to control inflation in the best way. That basis creates stability for the macroeconomy and creates conditions for economic growth. Thus, it can be said that reducing VAT is a multi-target policy, with a positive impact on the economy in general.

Tax reduction will have a certain impact on budget revenue. According to you, what solutions does the Finance sector need to make up for revenue shortfalls and ensure budget revenues meet estimates?

The first and most important thing is to promote digitalization in the financial sector to reduce time, costs, and effort for management and supervision. This is the most important solution to help the Finance and Tax sectors collect budget simply, quickly and accurately. At the same time, we must better implement the process of digitizing the financial sector, including the tax sector, specifically applying electronic invoices. Electronic invoices connect businesses' revenues and expenditures with tax authorities, thereby making business operations transparent, clear, and easy to check and control. In addition, promoting digital transformation also minimizes direct contact between tax and customs ministries and businesses.

Along with digitalization, I also think that Tax and Customs agencies need to take measures to support businesses so they can manage their finances better, which is a higher goal of economic security. That is, how can management agencies support businesses to better manage their finances, to have revenue and profits? When providing such support to businesses, the management agency will also understand the financial situation of the business, thereby preventing tax evasion and avoidance. These are things the Finance industry needs to pay attention to in the coming time to support businesses, thereby nurturing and strengthening revenue sources for the state budget.

Thank you Sir!

By HoaiAnh (recorded)/Quynhlan

Related News

Tax sector achieves revenue target of about VND1.7 million billion

Tax sector achieves revenue target of about VND1.7 million billion

VCN – Motivated by the revenue collection by the end of December 2024, the General Department of Taxation has accomplished the revenue collection.
Achievements in revenue collection are a premise for breakthroughs in 2025

Achievements in revenue collection are a premise for breakthroughs in 2025

VCN – Motivated by great efforts and effective implementation of solutions, as of December 10 the total State revenue from imports and exports saw a year-on-year increase of 13.8% to VND397,861 billion, meeting 106.1% of the estimate. The revenue us estimated to reach VND420,000 billion, meeting 112 % of the estimate, up 13.9% over the same period in 2023. The achievements in 2024 are a premise for a breakthrough in revenue collection in 2025.
Enterprises face difficulties in tax refunds due to partners closing

Enterprises face difficulties in tax refunds due to partners closing

VCN - On December 13, at a dialogue conference on tax and customs policies and administrative procedures organized by the Ministry of Finance in coordination with the Vietnam Chamber of Commerce and Industry (VCCI), enterprises proposed solutions to many problems related to tax policies such as VAT refunds, tax declaration procedures, electronic invoices, etc.
Answering many questions from businesses at dialogue conference on tax and customs policies

Answering many questions from businesses at dialogue conference on tax and customs policies

VCN - Many opinions and recommendations related to tax and customs issues were raised by the business community at the dialogue on tax and customs policies and administrative procedures in 2024, organized by the Ministry of Finance.Representatives of the Ministry of Finance, the General Department of Taxation, and the General Department of Customs provided specific responses, and affirmed that they will continue to research and advise on the assessment, review, and amendment and supplementation of appropriate regulations.

Latest News

Untying the knot for green finance

Untying the knot for green finance

VCN - Green finance is a crucial resource for greening businesses. Completing the policy framework for green finance is urgently needed to unlock this capital flow.
Ensuring efficiency and transparency in use and management of houses and land at State enterprises

Ensuring efficiency and transparency in use and management of houses and land at State enterprises

VCN - According to the Ministry of Finance, the issuance of Directive on strengthening management, improving the efficiency of use and handling of houses and land at State-owned enterprises to ensure the effective management, use and handling of houses and land for the right purposes, and to avoid loss and waste.
Vietnam

Vietnam's stock market to develop strongly and sustainably

VCN - This was emphasized by Minister of Finance Nguyen Van Thang at the Conference to review the work of 2024 and deploy the work of 2025 of the State Securities Commission (SSC) held on the afternoon of December 18.
General inventory of public assets raises efficiency of use and management of country

General inventory of public assets raises efficiency of use and management of country's resources

VCN – The implementation of the General Inventory Project by the Ministry of Finance, ministries, central and local agencies has ensured progress according to Project 213 and the plan issued by the Ministry of Finance. This is the information provided by a representative of the Department of Public Asset Management (Ministry of Finance) at the press conference on the implementation of the General Inventory Project of public assets organized by the Ministry of Finance on the afternoon of December 18.

More News

Publicizes progress of public investment disbursement for important national projects

Publicizes progress of public investment disbursement for important national projects

VCN – Important national projects, inter-regional transport projects, riverbank and coastal erosion treatment projects all have disbursement rates lower than the estimated average disbursement rate of the whole country, the Ministry of Finance said.
Six SOEs to be transferred back to industry ministry

Six SOEs to be transferred back to industry ministry

Six State–owned enterprises (SOEs) with a total State stake of 800 trillion VND (31.5 billion USD) will be transferred back to the Ministry of Industry and Trade (MoIT) after six years under the management of the Commission for the Management of State Capital at Enterprises (CMSC).
PM urges stronger measures to manage interest rates

PM urges stronger measures to manage interest rates

Prime Minister Pham Minh Chinh has asked the State Bank of Vietnam (SBV) to proactively, flexibly, promptly, and effectively manage the monetary policy in combination with the expansionary fiscal policy and others.
Six SOEs to be transferred back to industry ministry

Six SOEs to be transferred back to industry ministry

Six State–owned enterprises (SOEs) with a total State stake of 800 trillion VND (31.5 billion USD) will be transferred back to the Ministry of Industry and Trade (MoIT) after six years under the management of the Commission for the Management of State Capital at Enterprises (CMSC).
Vietnamese products: Conquering foreign customers in supermarket systems

Vietnamese products: Conquering foreign customers in supermarket systems

VCN - According to the Ministry of Industry and Trade, the proportion of Vietnamese goods in distribution channels currently reaches more than 80% in supermarkets and 60% or more in traditional retail channels. For many retailers, Vietnamese goods have become a growth driver as they not only do business successfully in the domestic market but also export.
Strengthen the management and use of electronic invoices for e-commerce

Strengthen the management and use of electronic invoices for e-commerce

VCN - Prime Minister Pham Minh Chinh requested ministries, branches and localities to strengthen the management and use of electronic invoices and improve the efficiency of tax collection for e-commerce.
Ministry of Finance proposes comprehensive amendments to the Personal Income Tax Law

Ministry of Finance proposes comprehensive amendments to the Personal Income Tax Law

VCN - The Ministry of Finance has just completed the proposal to draft the Personal Income Tax Law (PIT) and officially solicited public comments. By amending and supplementing nearly 90% of the total number of articles of the current PIT Law, the Ministry of Finance has submitted to the Government for permission to propose the draft PIT Law to replace the PIT policy system. The project is expected to be approved by the National Assembly in May 2026.
Expansionary fiscal policy halts decline, boosts aggregate demand

Expansionary fiscal policy halts decline, boosts aggregate demand

VCN - Customs News interviews Ms. Nguyen Thanh Nga, Deputy Director of the Institute for Financial Strategy and Policy (Ministry of Finance).
Ministry of Finance stands by enterprises and citizens

Ministry of Finance stands by enterprises and citizens

VCN - This was the affirmation of Deputy Minister of Finance Cao Anh Tuan at the 2024 Dialogue Conference on Tax and Customs Policies and Administrative Procedures. The conference, jointly organized by the Ministry of Finance and the Vietnam Chamber of Commerce and Industry (VCCI) on December 10, attracted 530 enterprises from the northern region.
Read More

Your care

Latest Most read
Untying the knot for green finance

Untying the knot for green finance

VCN - Green finance is a crucial resource for greening businesses. Completing the policy framework for green finance is urgently needed to unlock this capital flow.
Ensuring efficiency and transparency in use and management of houses and land at State enterprises

Ensuring efficiency and transparency in use and management of houses and land at State enterprises

VCN - According to the Ministry of Finance, the issuance of Directive on strengthening management, improving the efficiency of use and handling of houses and land at State-owned enterprises to ensure the effective management, use and handling of houses an
Vietnam

Vietnam's stock market to develop strongly and sustainably

VCN - This was emphasized by Minister of Finance Nguyen Van Thang at the Conference to review the work of 2024 and deploy the work of 2025 of the State Securities Commission (SSC) held on the afternoon of December 18.
Tax sector achieves revenue target of about VND1.7 million billion

Tax sector achieves revenue target of about VND1.7 million billion

VCN - With the determination to accomplish the revenue collection to create resources for economic development under the Prime Minister's direction, the entire Tax sector has made efforts to perform the revenue collection in the last days of 2024.
General inventory of public assets raises efficiency of use and management of country

General inventory of public assets raises efficiency of use and management of country's resources

VCN – The implementation of the General Inventory Project by the Ministry of Finance, ministries, central and local agencies has ensured progress according to Project 213 and the plan issued by the Ministry of Finance. This is the information provided by
Mobile Version