A shopper browses products at a supermarket in HCM City (Photo: VNA) According to the ministry's tax department, the government is to consider twooptions regarding VAT reduction.
The first one is slashing 2% off the current 10% VAT on a number of goods andservices.
The second one is also slashing 2% off the current 10% VAT but excludes goodsand services that were already under the effect of a previous VAT reduction aspart of a government's policy to boost economic recovery after COVID-19.
Businesses have been long asking for additional support from the government tohelp speed up economic recovery and to cope with recent difficulties.
The Ho Chi Minh City Food and Foodstuff Association (FFA) said businesses havebeen struggling since the end of last year with rising interest rates, poorliquidity, increased risk in the bond and stock markets and higher input andlogistics prices.
In addition, orders for export have been on the decrease. According to the FFA,VAT reduction was among one of the most effective policies in supportingbusinesses and urged the government to extend the policy.
Similarly, the Vietnam Beverage Association (VBA) asked the government toextend the policy at least until the end of this year, saying while there hasbeen some improvement in recent months it will take a long time for thebeverage industry to fully recover after the pandemic.
The European Chamber of Commerce (EuroCham) said VAT reduction has played a keypart in speeding up economic recovery, and has been a boon to businesses andconsumers alike.
The chamber said it has helped with the government's efforts in keepinginflation in check, boosting consumption and encouraging businesses to investin expanding their operations. Consumers have also benefited from the lowerVAT, which is in line with the government's policy to aid the populationpost-pandemic./.
VNA
