Today: 05/03/2024 11:27:54 (GMT+7)

Value-added tax cut welcomed

Consumers and producers are happy to see the implementation of the 2% reduction of value-added tax (VAT) for products starting from July 1.

The Government on June 30 issued a decree on reducing the VAT in line with the National Assembly’s resolution dated June 24, 2023, on the matter.

Value-added tax cut, Consumers and producers, reducing the VAT, financial monetary policies, VAT reduction, total retail sales, socioeconomic recovery

Illustrative photo.

Accordingly, the 2% VAT cut is applied to goods and services which are currently subject to a rate of 10%, except for those belonging to the groups of telecommunications, financial and banking activities, securities, insurance, real estate business, metal, and cast metal products, products of mining (except for coal), coke, refined petroleum, and chemical products.

Last year, under an NA resolution on financial monetary policies for the socio-economic recovery programme, the implementation of VAT reduction helped businesses and people save a total of about 44.5 trillion VND (1.87 billion USD). The VAT reduction partly helped the country's total retail sales of consumer goods and services increase by 19.8%, while domestic VAT collection increased by 10% year-on-year.

The continuation of the VAT reduction policy from July 1 to December 31, 2023, is expected to benefit both consumers and enterprises.

Reducing 2% VAT leads to a reduction of the final price that consumers have to pay, then pushes consumption. Therefore, businesses have simultaneously applied the new VAT rate and notified customers and consumers about the reduction.

According to the Ho Chi Minh City Trade Cooperative Union (Saigon Co.op), it is ready to offer discounts on thousands of products for the entire retail system with 800 points of sale nationwide as soon as the 2% VAT reduction takes effect.

Nguyen Ngoc Thang, operation director of the Co.opmart chain, said that it is a practical plan in response to the country’s socioeconomic recovery programme.

The tax cut together with promotion programmes of the Co.opmart offer opportunities for the consumers to enjoy big discounts.

A staff at Co.opmart Nguyen Dinh Chieu in Ho Chi Minh City’s District 3 said that products in five categories including groceries, fresh food, processed food, garment, and home appliances are discounted from 22% to 62%.

More than 2,000 products sold at Co.opmart in the fresh food category, mainly meats and vegetables, have prices reduced by 22% on average.

Products like soft drinks and milk have prices decreased by 32% on average; fashion products’ prices 42%, prices of household items including pots, pans, and electric kettles by an average of 62%.

According to statistics from the financial industry, over 20,000 products belonging to categories of dried food, beverage, milk, confectionery, fashion, and household goods sold in supermarkets are subject to the 2% VAT reduction.

The items with VAT reduction to 8% are in the essential goods basket, accounting for 75% of the products consumers usually shop for at supermarkets.

Seven out of every 10 shoppers in supermarkets will get benefits from the Government’s VAT cut, an economist told Tuoi tre (Youth) newspaper.

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Source: VNA

Value-added tax cut, Consumers and producers, reducing the VAT, financial monetary policies, VAT reduction, total retail sales, socioeconomic recovery
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