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Thursday, September 29, 2022

Tax cuts help control inflation: Finance Ministry

By Van Phong

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HCMC – Tax and fee reductions have contributed to bringing inflation under control in Vietnam, according to Deputy Minister of Finance Vo Thanh Hung.

Speaking at a press briefing on April 18, Deputy Minister Hung said the conflict between Russia and Ukraine had inflated the prices of goods, mainly food, foodstuff, fuels and materials, putting pressure on inflation.

To help production and business activities recover after the Covid pandemic, the ministry will propose the Government extend the payments of some taxes and fees worth some VND135 trillion to three to nine months.

“The proposal will help firms reduce the pressure on loan interest payments, which might be considered as the Government’s interest rate support,” said Hung.

Since early 2022, the National Assembly and the Government have issued multiple policies to cut the value-added tax by 2% from 10%, lower the registration fee for locally assembled or manufactured cars and reduce the environmental protection tax on jet fuel to ease the financial burdens on the aviation sector.

Due to the upsurge in global fuel prices, the National Assembly Standing Committee decided in late March to halve the environmental protection tax on fuels from April 1. Accordingly, the tax has been cut by VND2,200 on each liter of gasoline and VND1,100 on each liter or kilogram of diesel oil, heavy fuel, lubricating oil and lubricant grease.

The reductions of taxes and fees have eased the expenditure pressure on firms and controlled inflation in the first quarter of the year. Hung said that inflation inched up 1.92% year-on-year between January and March.

To put inflation under control, the Government told the competent agencies to keep a close watch on the prices of goods, especially those which have a significant impact on inflation from now until the end of the year to adopt appropriate measures, Hung said.

The ministries were tasked with offering support policies for production activities to ramp up the supply of goods in the local market.

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