To stimulate consumer demand from value added tax reduction

On June 30, the Government issued Decree No. 72/2024/ND-CP regulating value added tax (VAT) reduction policy according to Resolution No. 142/2024/QH15 dated June 29, 2024 of the National Assembly. Accordingly, from July 1 to December 31, 2024, VAT will decrease by 2% (from 10% to 8%) for some groups of goods and services. This contributes to reducing the selling price of goods and services, stimulating consumer demand, promoting production, trade and service activities across the country in general and in the province in particular in the last months of the year.

Customers do shopping at The City supermarket (Yen My)

VAT is an indirect tax, included in the selling price of products, goods and services. Therefore, when tax is reduced, the prices of goods and services will decrease. The policy is issued and implemented to ensure the goal of stimulating consumer demand, in accordance with the current economic context, boosting the production and business activities to soon recover and develop to contribute to the national budget and promote economic development. The Decree clearly stipulates VAT reduction for groups of goods and services currently subject to a tax rate of 10%, except for groups of goods and services including: Telecommunications, financial activities, banking, securities, insurance, real estate business, metals and fabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products; goods and services subject to special consumption tax; information technology according to the law on information technology. The VAT reduction for each type of goods and services is applied uniformly at all stages of import, production, processing, and commercial business.

In order for the policy to be implemented effectively, functional branches and localities in the province have stepped up propaganda and dissemination work so that units producing and trading goods and services in the province apply the correct tax rates, ensuring consumers benefit from this tax reduction policy. Along with that, promptly guide and remove difficulties for businesses and business households in performance such as: Identifying commodity codes subject to VAT reduction; adjusting prices of goods and services...

In the first 6 months of this year, trade and service activities in the province have been stable, maintaining growth momentum with total retail sales of goods and consumer service revenue reaching over 51.7 trillion VND, getting over 54% of the yearly plan. In the last months of the year, the continuous implementation of domestic consumption stimulation policy, trade promotion activities, business support and a 2% VAT reduction will contribute to maintaining the growth of trade - service sector, increasing consumer purchasing power.

In fact, two VAT reductions (2022 and 2023) show the positive impact of this policy on people, businesses and the economy. At The City supermarket (Yen My), a retailer of thousands of consumer goods and essential goods, a large proportion of goods are subject to the VAT reduction policy. To stimulate consumption demand and ensure customers' rights, the supermarket has proactively classified the list of goods eligible for tax reduction, updated the sales software, and adjusted selling prices to ensure compliance with regulations. Ms. Ngo Thi Thoa, manager of The City supermarket (Yen My) said: Currently, the supermarket has classified groups and quantities of goods to receive a 2% VAT reduction; applied many promotional and discount policies... Thereby, it has contributed to stimulating consumer demand, increasing supermarket sales revenue, providing customers with quality products at attractive prices and dedicated service attitude.

Not only production and business units benefit, but consumers are also direct beneficiaries of the policy of maintaining VAT reduction because the prices of goods and services are maintained at a stable and appropriate level to the economy of many families. According to Ms. Tran Thi Thuy in Me So commune (Van Giang), she is very happy that the VAT reduction policy is carried out until the end of this year, which helps her and her family save a monthly amount of money on expenses.

From the actual production and business of establishments and businesses, it can be seen that the policy of VAT reduction from 10% to 8% also helps businesses, production and business establishments reduce costs when purchasing raw materials, fuel, materials and other input factors, helping businesses increase resilience, expand production and business, reduce production costs, and lower product prices. Reducing VAT by 2% may reduce budget revenue in the short term, but when businesses develop and operate effectively, they will contribute more to the state budget. This policy is expected to contribute to promoting trade and service activities in the province in particular, stabilizing the macroeconomy and restoring economic development of the province and the country in general in 2024.