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Wednesday, June 19, 2024

VCCI proposes applying VAT cut to all goods and services

The Saigon Times

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HCMC – The Vietnam Chamber of Commerce (VCCI) has proposed reducing value added tax (VAT) from 10% to 8% for all goods and services.

The VCCI’s proposal is in response to the Ministry of Finance seeking feedback on the reduction of the VAT for certain goods and services in the first half of 2024.

The two-percentage-point VAT reduction would apply to a variety of goods and services currently subject to a VAT rate of 10%. However, it would not apply to goods and services in sectors such as telecommunications, information technology, finance and banking, securities, insurance, real estate, metal production, oil refining, mining, chemical production, and goods and services subject to the excise tax.

According to VCCI, the extension of the two-percentage-point VAT cut into the first half of next year is necessary. However, many businesses find it challenging to benefit from this incentive policy, as they do not know how to classify which goods should be subject to 10% and which should be entitled to the reduced VAT.

Despite a guiding document issued by the Government for the implementation of the VAT reduction, businesses remain confused, in practice, about the classification of goods, said the VCCI.

Tax and customs authorities also find it difficult to help businesses identify goods subject to VAT cuts.

Thus, to create favorable conditions for enterprises, VCCI has proposed that lawmakers consider reducing the VAT from 10% to 8% for all goods and services.

On October 24, the Vietnam Banks Association suggested including banks in the two-percentage-point VAT reduction plan slated for the first half of 2024. This is aimed at providing additional resources for banks to invest in technology and ensure operational safety.

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