According to estimates by the General Department of Taxation, Ministry of Finance , people and businesses can save 47,000 billion VND in 2024 from reducing VAT by 2%.
From July 1, the 2% VAT reduction policy will continue to be extended until the end of this year. This is a policy that was just approved by the 7th session of the 15th National Assembly last weekend. Except for the finance, banking, securities, insurance, real estate, and metal industries, all other industries currently subject to a 10% tax rate will be reduced to only 8%. This is the 4th time, since 2022, that the National Assembly and the Government have issued this policy to support people, businesses, and stimulate consumption.
Of all fiscal policies, VAT reduction is the most meaningful and impacts most people and businesses. Consumers will benefit first. 2% may not be much, but with larger bills, it is also significantly reduced. For example, a bill worth 16.3 million VND. Instead of paying 10% VAT of 1,630,000 VND, with 8%, you only have to pay 1,370,000 VND.
Importantly, this is not just a one-time reduction, but will be applied to all shopping trips by consumers until the end of this year. According to estimates from the General Department of Taxation, Ministry of Finance, people and businesses can save 47,000 billion VND in 2024 from the 2% VAT reduction.
Reducing VAT by 2% will help save a little bit on bills, from a few thousand to a few tens of thousands of dong. The prices of goods will also decrease a little bit, consumers will buy more goods, and businesses will also increase sales.
"A 2% tax reduction seems small, but if you go out 5-7 times a month, it adds up to a lot, right?", said consumer Nguyen Thien Ly.
"2% means that every 1 million will be reduced by 20,000 VND. With a frequency of going to the supermarket twice a week, it is also a relatively small reduction for people. Every penny saved is a penny saved for working people like us," said consumer Pham Thi Hong Hanh.
Ms. Ngo Thi Minh Thu - Director of AEON Vietnam Supermarket General Merchandise Center, Hai Phong Le Chan branch said: "Reducing VAT by 2% helps reduce the price of many goods. Therefore, we can still maintain steady growth in production and business activities. Every year we have a growth rate of 10%. From January until now, we have maintained a growth rate of 110% compared to 2023".
Boosting production from 2% VAT reduction
If in 2021, the 2% VAT reduction policy had not been applied, the total retail sales of goods and consumer service revenue would have reached over VND 4,789,000 billion. In 2022, after applying the 2% tax reduction, this figure would have increased to VND 5,679,000 billion, an increase of 19%. In 2023, it would continue to increase to VND 6,231,000 billion. And in the first 6 months of this year, this figure is still growing by 8.6% over the same period.
The 2% VAT reduction has contributed to stimulating people's consumption demand. Over the past 2 years, not only consumers and businesses have benefited, but also manufacturing enterprises have received cash flow support thanks to this policy to restore production and business after the Covid-19 pandemic.
Since July 2023, the company has benefited from a 2% reduction in VAT, earning more than VND100 billion. Thanks to this source of money, the company has been able to purchase more than 50,000 tons of raw coal to serve its production and business activities. Thanks to this, production and business activities have grown more and more.
Mr. Nguyen Huy Thanh - Deputy General Director of Hai Phong Thermal Power Joint Stock Company said: "This capital source contributes greatly to our ability to pay for input materials. Therefore, in 2023, we overcame difficulties and had good business results. Revenue reached 11,500 billion, exceeding 8.4% compared to 2022. In the first 6 months of 2024, our revenue reached 6,300 billion. This shows that the Government's tax exemption and reduction policy is very timely, meaningful, and practical, contributing to supporting businesses to overcome the current difficult period."
"Although tax reduction will reduce revenue in the short term, in the long term it will positively affect the recovery and development of business production and business, thereby contributing to the State budget. In the last 6 months of 2024, Hai Phong Tax Department will actively promote, disseminate and support businesses and people in the area to know and benefit", said Mr. Vu Huy Khue - Deputy Director of Hai Phong City Tax Department.
The recovery of business production is evidenced by the GDP growth of 6.42% in the first 6 months of this year. In particular, many industries have had impressive growth rates such as: export of goods and services increased by 16.89%, industry increased by 7.54%, electricity production and distribution increased by 13.26%, construction increased by 7.34%, wholesale and retail increased by 7.34%.
A representative of the General Department of Taxation said that in order to help people and businesses promptly enjoy the 2% VAT reduction policy for the last 6 months of this year, the agency has just sent an urgent telegram to local tax departments, requesting them to proactively propagate and guide taxpayers. Especially how to determine which items are reduced, avoiding the situation where businesses have to struggle to determine as before.
Ms. Pham Thi Minh Hien - Deputy Director of the Tax Policy Department, General Department of Taxation, Ministry of Finance said: "The National Assembly's Resolution still inherits the old regulations in Resolution 43 of 2022. Therefore, the VAT reduction still applies to goods that are subject to a tax rate of 10%, excluding some goods that are not subject to the reduction. Determining VAT-reduced goods also encountered difficulties in early 2022 when it was first implemented, but up to now, in general, we have assessed that there are no more problems in determining tax-reduced goods."
The representative of the General Department of Taxation also added that the 2% VAT reduction policy, which has just been issued for the 4th time, and the tax payment extension policy, which has just been issued for the 5th time, implemented from Resolution 42 of the 15th National Assembly, are unprecedented fiscal policies, implemented over a long period of time. This shows the companionship of the National Assembly and the Government with the people and businesses in any circumstances, to complete the country's socio-economic development goals. True to the spirit of Resolution 93 of the Government on removing difficulties and promoting production and business activities for people and businesses.
According to VTV
Source: https://doanhnghiepvn.vn/kinh-te/nguoi-dan-doanh-nghiep-tiet-kiem-duoc-47-000-ty-dong-tu-giam-thue-vat/20240703084155280
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