Illustrative photo (Photo: tuoitre.vn) Hanoi (VNA) – Consumers and producers are happyto see the implementation of the 2% reduction of value-added tax (VAT) forproducts 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.
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 thesocio-economic recovery programme, the implementation of VAT reduction helpedbusinesses 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 1to December 31, 2023, is expected to benefit both consumers and enterprises.
Reducing 2% VAT leads to a reduction of the final pricethat consumers have to pay, then pushes consumption. Therefore, businesses have simultaneously applied the new VAT rateand 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 forthe entire retail system with 800 points of sale nationwide as soon as the2% 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 socioeconomicrecovery programme.
The tax cut together with promotion programmes of theCo.opmart offer opportunities for the consumers to enjoy big discounts.
A staff at Co.opmart Nguyen Dinh Chieu in Ho Chi MinhCity’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 freshfood category, mainly meats and vegetables, have prices reduced by 22% on average.
Products like soft drinks and milk have prices decreasedby 32% on average; fashion products’ prices 42%, prices of householditems including pots, pans, and electric kettles by an average of 62%.
According to statistics from the financial industry, over20,000 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 essentialgoods basket, accounting for 75% of the products consumers usually shop for atsupermarkets.
Seven out of every 10 shoppers in supermarkets will getbenefits from the Government’s VAT cut, an economist told Tuoi tre (Youth)newspaper./.
