Legislators work on further application of 2% VAT reduction

Legislators on May 24 listened to a proposal and a verification report on the further application of the 2% reduction in the value added tax (VAT) under a resolution dated January 11, 2022, as part of the ongoing fifth session of the 15th National Assembly.

Minister of Finance Ho Duc Phoc noted that the Government submitted Resolution 43/2022/QH15 on fiscal and monetary policies in support of the socio-economic recovery and development programme for approval.

The resolution prescribes the VAT reduction for most items from 10% to 8%, he continued, noting that the document has helped businesses and people with about 44.5 trillion VND (1.8 billion USD), contributing to spurring production and business, generating jobs for labourers, stimulating consumption, and raising State budget collection.

Given the complexities in the domestic and global situation forecast for the time ahead, which would challenge the domestic economy and enterprises, the Government proposed the further application of the 2% VAT reduction from July 1, 2023 to the end of this year, the minister said.

According to Chairman of the NA’s Finance-Budget Committee Le Quang Manh, most of the members of the committee approved the Government’s proposal to further support people and businesses in recovery and development.

The committee, however, suggested the Government evaluate the impact of the reduction more precisely to meet set targets, he said, adding that some proposed raising the rate to 4% from the present 2%.

Most of the lawmakers also agreed with the duration from July 1 to the end of this year, while some others held that it should be extended to ensure the stability and efficiency of the policy, Manh said.