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Tuesday, June 25, 2024

Banks seek inclusion in VAT reduction plan

The Saigon Times

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HCMC – The Vietnam Banks Association has proposed a two-percentage-point reduction in value-added tax (VAT) for banks, citing the challenging economic conditions this year and next.

In a recent submission to the Ministry of Finance and the Vietnam Chamber of Commerce and Industry (VCCI), the association suggested that banks be included in the two-percentage-point VAT reduction plan slated for the first half of 2024.

Vietnamese banks are coming under mounting pressure, including a surge in bad debt and potential risks. Projections indicate a significant downturn in banking operations in 2023 and 2024. Despite these challenges, banks are persisting in implementing interest cut programs and offering fee waivers in line with Government directives.

The inclusion of banks in the VAT rate reduction category for goods and services is aimed at fortifying these initiatives and providing additional resources for businesses to invest in technology and ensure operational safety.

The Ministry of Finance had previously proposed a two-percentage-point VAT reduction for selected goods and services, currently taxed at 10%, during the initial six months of 2024. Input is currently being sought from various sectors.

In 2022, the National Assembly enacted Resolution 43, which reduced VAT by two percentage points for specific goods and services taxed at 10% from February 1 to December 31, 2022.

This policy was extended into 2023 through Resolution 101, effective from July 1 to December 31. During its three-month enactment, the total amount of VAT reduction was around VND 11.7 trillion.

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