NA deputies propose continued extension of VAT reduction policy

National Assembly deputies today proposed a continued extension of the Value Added Tax (VAT) reduction policy to stimulate domestic consumption.

NA deputies propose continued extension of VAT reduction policy

This morning, National Assembly deputies discussed the implementation of its Resolution No. 43/2022/QH15 on fiscal and monetary policies to support recovery and socio-economic development programs and resolutions of the National Assembly on a number of important national projects until the end of 2023. Deputies said that it is necessary to continue policies to stimulate domestic consumption and consider continuing to reduce some taxes and fees because, in fact, the reduction of taxes and fees in the past two years did not affect total budget revenue.

The policy must be feasible and timely

Deputies voiced their opinions that the issuance of Resolution No. 43/2022/QH15 is very timely and pleasing to people. The proposed policies are strategic, promoting socio-economic development, supplementing large resources from the state budget and other mobilized capital sources to implement social security policies and remove bottlenecks for businesses and dwellers; therefore, it has helped revive both supply and demand of the economy and helped Vietnam not fall into inflation like some countries.

Many deputies agreed on ongoing projects, allowing the implementation time of program capital to be extended until the end of 2025 for projects that are likely to be completed by 2025. Moreover, they said the country should strive to complete the disbursement of allocated program capital by December 31, 2024, to put completed projects into use and promote capital investment efficiency.

At the same time, the promulgation of legal documents and documents providing specific guidance on several policies is still slow, regulations are unclear and inconsistent; as a consequence, it has resulted in confusion in implementation, low disbursement rate; plus, a number of policies have not carried out well to achieve its initial goal due to these reasons.

Deputy Tran Quoc Tuan also proposed that immediately after this meeting, the National Assembly and the Government must remove difficulties in accessing loans for businesses, because currently, businesses have the most difficulty at this stage with a focus on support to overcome difficulties for 27 localities, ministries and agencies with 70 recommendations.

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Deputy Ha Sy Dong

Deputy Ha Sy Dong from the Central Province of Quang Tri said that during the implementation of Resolution 43, policymakers learned a lesson that the policy must be feasible and chosen at the right time. For example, the policy of reducing VAT, extending tax payments for businesses, and reducing gasoline taxes are all very practical and effective meanwhile, the solution to support 2-percent interest rates is ineffective.

Deputy Ha Sy Dong also said that the coordination between the Government and the National Assembly is especially important; for example, the 2-percent VAT reduction policy could have been adjusted to reduce all items from 10 percent to 8 percent.

Regarding the policy of reducing tax payments until the end of 2024, many opinions also suggest reducing it by a few more months to 2025 because businesses are facing difficulties at this time.

Proposal to review tax policy on personal income

Appreciating the effectiveness of the 2-percent VAT reduction policy, Deputy Mai Van Hai from Thanh Hoa Province proposed that the National Assembly consider allowing it to continue to be extended for an appropriate period. At the same time, he supposed that the government should consider continued expansion of the application of a number of specific policy mechanisms that apply not only to important national projects and highways but also to other important national and provincial projects.

Deputy Trinh Thi Tu Anh from Lam Dong Province also said that it is necessary to continue policies to stimulate domestic consumption as well as continued reduction of some taxes and fees to support businesses and to stimulate demand because, in reality, the reduction of taxes and fees over the past 2 years has virtually no impact on total budget revenue. Additionally, she highly appreciated the National Assembly's comments on the Law on Value Added Tax (amended) at this 7th session and also proposed reviewing tax policy on personal income to stimulate the consumer market while considering dependent deduction for personal income tax.

Deputy Dang Thi Bich Ngoc from the Northern Province of Hoa Binh proposed that the National Assembly consider extending the implementation of loan policies to support employment while maintaining loan programs to buy and rent-purchase housing according to the policy on social housing.

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