The Ministry of Finance is seeking opinions on continuing to reduce value added tax in the first 6 months of 2024.

Specifically, the Ministry of Finance proposed to reduce VAT by 2% for goods and service groups that are currently applying a tax rate of 10% (to 8%), except for some of the following groups of goods and services: telecommunications, information technology. information, financial activities, banking, securities, insurance, real estate business, metal production and production of prefabricated metal products, mining industry (excluding coal mining), manufacturing coke, refined petroleum, chemical manufacturing and chemical products, goods and services subject to special consumption tax.

The value-added tax reduction measure has been implemented in 2022 and 2023 and brings many positive impacts to businesses and the economy, especially helping to increase domestic consumption in the context of Export orders face many difficulties.

However, as noted by VCCI, businesses encounter many problems when applying this policy, mainly stemming from classifying which goods are subject to 10% tax and which goods are subject to tax reduction to 8%. .

Although the Government has issued Decree 15/2022/ND-CP and Decree 44/2023/ND-CP to guide implementation, in reality, the classification of goods and services into tax rates Different rates are still confusing.

In many cases, businesses look up the Appendixes of Decree 15 and 44 but do not dare to confirm that their goods and services are subject to the tax rate of 10% or 8%. Many businesses ask tax authorities and customs authorities, but these agencies do not dare to confirm for the business for fear of being wrong. Many businesses have to hire additional accountants to adjust invoices and books to comply with the new tax rates. Some businesses reported the situation of negotiating the purchase and sale of goods, having agreed with customers on quantity, quality, and price but could not agree on the tax rate of 8% or 10%, so the contract could not be signed.

For the above reasons, VCCI requested the drafting agency to consider a plan to reduce value added tax for all types of goods and services from 10% to 8%.

On October 24, the Vietnam Banking Association also proposed adding banks to the group of goods and services eligible for a 2% reduction in VAT rates to create conditions for credit institutions to have more resources. Support businesses and invest in digital transformation technology, ensuring security and safety in operations.

The Vietnam Banking Association added that the operations of credit institutions are currently extremely difficult, bad debts and potentially risky debts tend to increase, the operating results in 2023 and 2024 of Credit institutions are forecast to decline sharply compared to previous years, especially small-scale credit institutions, while credit institutions still have to implement interest rate support programs and fee exemptions. services for businesses and people under the direction of the Government.

The economic growth rate in 2023 is forecast to be just over 5%, which is a relatively low level over the past decades (except for the two Covid years 2020 and 2021). This difficult situation is expected to continue in the early part of 2024 when the world economy has not yet recovered and the domestic economy still faces many problems. Therefore, loosening fiscal policy, through continuing to reduce value added tax at this time, is extremely necessary, contributing to helping businesses regain growth momentum and create jobs.