The Government asked the National Assembly Standing Committee to allow a draft resolution on reducing VAT from 10% to 8% to support people and businesses in a shorter order, procedures and submit it to the National Assembly for approval through the process of a meeting next May.

In the Resolution issued on May 2, the Government approved the proposal to develop a project of the National Assembly's Resolution on VAT reduction in response to the request of the Ministry of Finance. The Government requested the Ministry of Finance to receive the opinions of the Government members and complete the draft resolution of the National Assembly in accordance with regulations.

The Government also decided to assign the Minister of Justice, authorized by the Prime Minister, on behalf of the Government to report to the National Assembly Standing Committee to add the project of the National Assembly's Resolution on VAT reduction into the law and ordinance development program in 2023 and allow the Resolution to be drafted in the shortened order and procedures, and submit it to the National Assembly for approval through the process of one National Assembly session (May 2023).

The Government's resolution also states that, in the Government's report to the National Assembly Standing Committee on the draft resolution of the National Assembly on VAT reduction, the Government respectfully requests the National Assembly Standing Party Committee reported and asked the Politburo on the policy of reducing VAT to support businesses and people to overcome the current difficulties in the process of reporting to the Politburo on the 5th Session. 15th National Assembly.

Previously, the Ministry of Finance proposed to reduce the VAT rate by 2% for all goods and services subject to the 10% tax rate (to 8%); reduce 20% of the percentage rate to calculate VAT for business establishments (including business households and business individuals) when issuing invoices for all goods and services subject have tax liability 10% VAT in 2023.

The above proposal aims to stimulate the consumption and demand, be suitable with the current economic context, thereby promoting production and business activities to recover and develop soon to contribute back to the state budget as well as the economy. 

The Ministry of Finance expects that the reduction in state budget revenue will be about 5.8 trillion VND/month. If it is applied in the last 6 months of the year, it will be equivalent to about 35 trillion VND.

In order to overcome and offset the impacts on state budget revenue in the short term as well as ensure the initiative in managing state budget estimates, the Ministry of Finance will coordinate with relevant ministries and localities focus on directing the implementation of Tax Laws; continue to reform and modernize the tax system, simplify tax administrative procedures; at the same time drastically manage state budget revenue, focus on timely and effective implementation of solutions for revenue management, cope with revenue loss, price transferring, and tax evasion.

Source: Taichinhdoanhnghiep