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“Leverage” for businesses and the economy

Dr. Mac Quoc Anh

According to Resolution 43/2022/QH15, from February 1, 2022, the VAT rate for some goods and services which are enjoying the 10% tax rate will be reduced to 8%. How do you assess this policy?

The VAT reduction policy, in addition to reducing tax payable for businesses, has contributed to stimulating consumption. Because, in the last two years, demand has been decreasing, while supply has been surging, the VAT reduction policy not only benefits businesses but also people. Actually, the goods have good quality and competitive prices, so people will get more benefit from buying goods at a more reasonable price.

Meanwhile, for the budget, the demand stimulus will increase revenue. In particular, in a supply value chain, many investors will come to the Vietnamese market when our country issues policies to exempt and reduce taxes and fees, especially VAT. Many countries have applied VAT 7-8% from five to ten years ago. Therefore, the VAT reduction policy is extremely significant. It has fully met the financial requirements of management agencies, people and businesses in 2022 and the following years.

In your opinion, how will this policy affect the business situation of enterprises and the economy?

The National Assembly has set a target of 6.5-7% GDP growth. To do this end, the Government, ministries and governmental agencies, especially the Ministry of Finance, have carefully studied to submit and promulgate policies on reducing and deferring taxes and fees. After the policy is issued, it will help businesses have good financial resources, encouraging them to invest in production and business activities, brands, scientific and technological change, contributing to improving corporate value. Thereby, helping businesses compete in the domestic market as well as in the global market.

For the economy, tax reduction policies will help attract foreign investors who are in need of investment and attract new economic potential to the Vietnamese market. This will help revive the economy more strongly in the new normal period.

Because the Decree is issued in the period leading up to the Lunar New Year, the content of the decree has not been fully understood. So, in order for this policy to come to life, what should the tax agency do?

I think it is necessary to issue more detailed and effective instructions by organizing training courses through tax departments, tax branches as well as local tax agents. Dialogues and seminars will also help businesses better understand and comply with the spirit of Resolution 43.

I also wish the authorities could introduce businesses that have effectively implemented these policies as an example for replication.

In particular, the authorities should also work with FDI enterprises, small and medium-sized enterprises and cooperative alliances because this group has significantly supported the economy.

After a short period of reducing VAT, some have not reduced tax intentionally when selling goods to consumers. How should these cases be treated?

In my opinion, because this is in the consumer's own interest, the consumer should give feedback to the seller, or report it to the tax authorities at all levels. Currently, tax departments or tax branches have hotlines to receive complaints. Each complaint will help the tax authority grasp the actual situation of policy implementation and then allow them take strict measures.

Thank you Sir!