Economists propose continued VAT reduction in 2024 with more beneficiaries

Experts believe that it is necessary to continue reducing value-added tax (VAT) in 2024 and more businesses are beneficiaries of the policy because domestic demand is still weak.

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At the discussion

This morning, the Vietnam Institute for Economic and Policy Research (VEPR) organized a discussion on Vietnam's economic prospects in 2024. Economists voiced their opinion that the government should continue to reduce VAT in 2024 while accepting more applicants - one of the important recommendations in the discussion.

According to economic experts, although 2023 is a turbulent year for the Vietnamese economy, the picture of Vietnam's economic growth in 2024 is expected to be more positive, with strong development potential in the medium and long term. International organizations such as the WB, IMF, AMRO all forecast that Vietnam's growth in 2024 will increase compared to 2023, reaching about 5.5 percent to 6 percent.

Accordingly, without unexpected factors, growth outcomes at the end of the year will probably be somewhere at the low average level from growth forecasts of major international organizations, or about 5.5 percent – 6 percent, which was heard at the discussion.

Vietnam is maintaining a stable macroeconomic foundation and the Southeast Asian country is consistent with policies to balance the macroeconomic balance and restore growth. However, due to limited fiscal resources after many years of budget deficits, along with monetary policy tied to inflation and exchange rate targets, Vietnam cannot pursue macroeconomic policies as other countries in the world.

Hence, to promote economic recovery and growth, economic experts recommended increasing public investment disbursement and prioritizing policies and reforms to remove difficulties and reduce burdens on businesses so that foreign investors can put their trust in Vietnam’s business environment to return to the country and expand their business.

In addition to VAT reduction, economists also believed that more specific consumer stimulation programs and policies are needed to directly support consumers in paying for products/services, especially with the orientation to green consumption to help protect the environment and implement the Net Zero commitment by 2050.

Last but not least, diversification of capital and investment channels outside of bank credit, through improving the efficiency and transparency of stock and bond markets and other capital channels associated with green credit, fair transformation and financial leasing are also other important recommendations.

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