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VAT, fuel tax cuts proposed for extension

The Saigon Times

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HCMC – Business associations have written to the Government and the Ministry of Finance proposing extending the VAT cut of two percentage points and the environmental protection tax cut for fuel till the end of 2023.

From January 1, 2023, many supporting policies for households and businesses will no longer be valid, including the VAT reduction and the environmental protection tax cut for fuel.

Earlier this year, the Government issued Decree 15 offering the VAT reduction for most products and services to support residents and enterprises to overcome challenges during and after the pandemic.

However, from the beginning of the year 2023, when the policies expire, the VAT rate will return to the former level of 10% from the current 8%.

According to Pham Hai Long, general director of Agrex Saigon Food Joint Stock Company, the 8% VAT will help stimulate consumption, prop up manufacturers and fuel economic growth.

Nguyen Duc Nghia, vice director of the Small and Medium Business Support Center under the HCMC Union of Business Association, said that VAT was imposed on all types of commodities, from manufacturing to the consumption of goods; therefore, the VAT cut will help reduce the costs of products and services, boosting consumption.

Apart from the request for the extension of the VAT cut, many businesses proposed maintaining a tax reduction policy for fuel till the end of next year.

World oil market uncertainties and volatile domestic fuel prices may affect the country’s socio-economic stability in the coming time. Therefore, bringing the environmental protection tax for fuel back to the former level will negatively impact daily life and business.

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