Businesses expect to continue to extend and reduce VAT until the end of 2023

​Starting from January 1, 2023, the policy of reducing the value-added tax rate (VAT) by 2% for a number of groups of goods and services... will expire. Instead of only paying the tax rate of 8%, buyers of goods and services return to pay 10% VAT as before.

In order to continue to support businesses and consumers, the 2% VAT reduction policy is expected to be extended in 2023.

In the current difficult context, when cash flow is in short supply and purchasing power declines, many businesses are expecting this policy to continue to be implemented, both to support businesses and consumers.
Supporting consumption to boost the economy
In 2022, the policy of reducing VAT from 10% to 8% has reduced the selling price of some goods on the market, thereby increasing purchasing power, contributing to creating favorable conditions for businesses expanding production activities, while also reducing inflationary pressure.
VAT is an indirect tax levied on all goods from production to consumption. The reduction of this tax rate, even if it is only 2%, will also help reduce the cost of products and services..., contributing to controlling inflation. The reduction of VAT will help businesses increase competitiveness, products are consumed more, increasing revenue and profit. This means that businesses will pay more tax to compensate for the budget revenue by reducing that difference.
“When our products are on the market, an additional discount, although not much, will stimulate consumers to buy more. Especially when the company's processed products are aimed at providing customers who are workers," shared the owner of a food and beverage business.
On the side of shoppers, Ms. Nguyen Thi Hai, from Thong Nhat ward, said that for every 100,000 VND purchased, she saved 2,000 VND. Every month, spending for a family of 6 like Mrs. Hai's is also a big amount, any reduction or that dong in a time of declining incomes and rising prices are all well worth it.
Meanwhile, an enterprise specializing in supporting industries in Bien Hoa often has to buy raw materials to make products. The price of plastic materials in the first half of 2022 has increased and fluctuated, making it difficult for businesses to export and import goods. The additional 2% VAT reduction helped businesses save more money, thereby having more resources in promoting production.
Surveys at other enterprises also show that the reduction of VAT reduces input prices, giving them the opportunity to maintain, recover and expand their business.
Enterprises expect to be extended in 2023
The special thing of this policy compared to other support policies such as reducing bank interest rates, accessing capital or preferential loan packages... is that there is no need to go through the review stages, approval of complex documents, or strict conditions. According to regulations, the reduction is generally applied to most goods, making most businesses and people benefit immediately.
“As an enterprise in the field of trade in goods, the policy of reducing VAT is something we hope to continue to implement in 2023. This is the easiest policy to apply, especially for small and medium-sized enterprises," shared Mr. Nguyen Van Huynh, Director of Tam Long Hung Phat Co., Ltd.
According to economist Can Van Luc, the challenge of the economy in 2023 is still great. Those are the external challenges that come in; the recovery of various production and business industries; Inflation is likely to increase hotly while interest rates are at very high levels. In addition, the Government's public investment programs have many barriers, enterprises face difficulties in personnel; The stock and bond markets are adjusting and healthy... creating pressure on operating policies.
According to Dr. Luc, the difficult context requires supporting and accompanying policies that need to be effective as soon as possible. Maintaining the health of businesses is very important, so it is necessary to continue the policy of relaxing, deferring and reducing taxes and fees. Continuing to reduce VAT is also one of the solutions to increase resistance for businesses in the coming time.