Why only 2% VAT reduction for 6 months?

On the afternoon of June 1, explaining and clarifying a number of contents related to the financial sector, regarding the issue of reducing 2% VAT, Minister of Finance Ho Duc Phoc said that according to the submission, the Government proposed to reduce from July 1, 2023 until the end of the year.

However, some delegates said that the reduction period was short and proposed extending the reduction period until the end of 2024 or 2025.

Regarding this issue, according to Mr. Phuc, firstly, the Government's plan was appraised by the Finance and Budget Committee and received comments from the National Assembly Standing Committee.

The second problem is that Resolution 43 is only effective until the end of this year. In addition, tax reduction must be consistent with balancing the budget. Besides, VAT reduction is to stimulate consumption to solve the difficulty immediately, that is, in the current period.

"For those reasons, the proposed plan is to reduce VAT by 2% for 6 months," the Minister of Finance emphasized.

Minister of Finance Ho Duc Phoc explained on the afternoon of June 1 (Photo: Quochoi.vn).

Regarding some opinions suggesting considering expanding the scope of subjects eligible for VAT reduction, applying an 8% VAT rate (reduced by 2%) to domestic automobile products, including vehicles with less than 24 seats. According to Mr. Phoc, automobiles are subject to special consumption tax so they are not subject to the scope of Resolution 43.

"Therefore, we do not include cars in the list of products eligible for a 2% VAT reduction," the Minister of Finance emphasized.

According to Mr. Phuc, the important thing now is to do everything possible to create conditions for businesses to increase their capacity, as well as increase the capacity of the economy.

"It would be better for production and business enterprises to have their obstacles and difficulties removed than to have their taxes reduced," said Mr. Phuc.

Regarding the proposal to reduce 50% of registration fees for domestically produced cars, the Minister of Finance said that he had submitted it to the Government. And the Government agreed with this proposal: "Reduce 50% of registration fees for domestically produced cars".

Regarding the amount of more than 1 million billion VND remaining in the bank, according to Mr. Phuc, this amount has been allocated for spending tasks and is included in the budget estimate approved by the Provincial People's Council and the National Assembly. Therefore, this source cannot be used for other spending tasks because the Constitution stipulates that all expenditures must be included in the budget estimate.

"If we want to restructure spending, we must present it to the National Assembly," Mr. Phuc emphasized .

Source: https://www.nguoiduatin.vn/vi-sao-chi-giam-2-thue-vat-trong-6-thang-a610688.html