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Thursday, June 13, 2024

VAT cut proposed to support businesses amid pandemic

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HCMC – The Government’s Private Economic Development Research Board and business associations have petitioned to halve the standard value-added tax (VAT) rate from 10% to 5% to reduce costs for consumers and stimulate consumer demand during and after the coronavirus pandemic.

This proposal was made from feedback for a draft Government Resolution on measures to remove difficulties for businesses, accelerate the disbursement of public investment and ensure public safety and security amid the coronavirus outbreak, reported Nguoi Lao Dong newspaper.

Businesses are currently in dire need of working capital to maintain their operations. Paying a VAT rate of 10% and having to wait until the end of the year to receive VAT refunds could trigger difficulties for enterprises and leave policies to stimulate consumer demand hard to be effectively executed, stated the Board.

Besides this, the Board and business associations suggested adding a regulation under which a land lease rate cut of 50% over a six-month term can be applied to lodging businesses such as hotels and resorts.

Operators of lodging facilities have been hit hard by the pandemic and are expected to recover slower than businesses in other sectors. Further, land lease rates account for a substantial portion of service prices among lodging businesses.

Accordingly, the reduction in land lease rates will encourage them to lower service prices to attract customers when the pandemic eases, the Board explained.


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