VAT reduction plan consistent with budget balance and goal of stimulating consumption

	Foreign passengers are refunded about VND34 billion of VAT
	The scope of subjects entitled to a 2% VAT reduction as proposed by the Government is appropriate

The meeting.

Appreciating the need to have solutions and policies to remove difficulties, allocate resources, and promote socio-economic development amid the economy facing many challenges, delegate Tran Chi Cuong (delegation of Da Nang City) said that the implementation of a VAT reduction in the second half of the year was too short and difficult to achieve the expected efficiency.

Accordingly, the delegate proposed to extend the policy to the end of 2024.

“Policy promulgation needs sufficient time to ensure that the policy can be put into reality, so that localities may actively calculate and balance the reduction in revenue and expenditure or vice versa, ensuring the making of estimates, balancing revenues and expenditures for the following year, ensuring stability and taking the initiative in effectively implementing the policy”, said Tran Chi Cuong.

Delegate Mai Thi Phuong Hoa (delegation of Nam Dinh province) highly appreciated the implementation of tax solutions in the past time. Hoa said that the flexible implementation of tax policies has contributed to reducing the cost of goods and services, promoting production and business, stimulating consumer demand, and creating revenue for the State budget.

Agreeing on continuing to implement the policy of 2% VAT reduction under Resolution No. 43/2022/QH15, however, the delegate said that difficulties and challenges in the near future would be quite big. Therefore, in order for this support to be more effective, and enough time for the policy to promote in practice, it is necessary to extend this policy until at least 2024.

The delegate said that it is necessary to promptly guide the application for VAT refund quickly and effectively for people and businesses.

At the meeting, delegate Nguyen Thi Viet Nga (Hai Duong) expressed her agreement with the promulgation of a Resolution to continue implementing the VAT reduction policy to help businesses and people solve the problem and difficulties in production and business, stable life while the economy faces many challenges.

The delegate proposed to expand the scope of objects eligible for VAT reduction, applying the 8% tax rate to automobiles (including cars with less than 24 seats) to stimulate consumer demand, help automobile makers solve difficulties, stabilize production and business, ensure jobs for workers, contribute to creating growth momentum for the automobile industry, thereby raising the State revenue as well as developing the economy.

According to the Minister of Finance, the facilitation to production and business of enterprises by removing obstacles, and creating a better market will be more effective than tax reduction.

Delegate Vu Tien Loc (Hanoi) said Vietnamese enterprises face difficulties. Workers and the people also suffer from this situation.

The number of businesses withdrawing from the market is only the tip of the iceberg, and operating businesses also face difficulties.

“Stimulating the domestic market is a key solution. VAT reduction will both support people and reduce difficulties for consumers, and have an immediate impact on the market of businesses," Mr. Loc said.

At the meeting, Minister of Finance Ho Duc Phoc said that the VAT reduction plan submitted to the National Assembly had been approved by the Finance and Budget Committee and consulted by the Standing Committee of the National Assembly before submitting it to the National Assembly at this session.

Responding to the comments of some delegates for extending the policy implementation time, the Minister of Finance said that Resolution 43 is only valid until the end of 2023. The plan submitted by the Government is consistent with the budget balance and goal of stimulating consumption demand and solving difficulties in the current period.

Regarding the proposal to include cars into subject to VAT reduction, the Minister of Finance said that cars are subject to excise tax, which is not governed by Resolution 43. Cars are not subject to VAT reduction because the policy only focuses on reducing taxes for essential areas.

The Minister of Finance said that we need to facilitate enterprises, enhance the capacity of enterprises, and increase the capacity of the economy. The facilitation of production and business of enterprises by removing obstacles, and creating a better market will be more effective than tax reduction.