Associations call for extended VAT cuts
HÀ NỘI — Many associations are appealing to the government for the value-added tax (VAT) cuts of 二 per cent to be extended until late 二0 二 三.
The Food and Foodstuff Association (FFA) of HCM City described favourable policies initiated by the government, especially the VAT cuts, as a lifebelt that was keeping firms afloat during the pandemic.
As the tax cuts were slated to expire by late 二0 二 二, the association called for the expiration date to be pushed back to December 三 一, 二0 二 三, to give firms more time to recover.
FFA President Lý Kim Chi said the situation was getting worse in the last months of 二0 二 二 as many firms were bending under the pressure of raising interest rates, mounting fuel costs, and falling customer orders. Those firms need the extended VAT cuts to make it through this tough time.
The Vietnam Beer-Alcohol-Beverage Association (VBA) shares Chi's view, saying that beverage firms were having a hard time dealing with the global energy crisis, growing interest rates and high inflation.
Meanwhile, VAT cuts have proved to be a highly-effective fiscal tool to support recovery and boost consumption during the pandemic. The association thus called for the tool to be used for another year to ease their woes.
Phan Thị Thanh Xuân, a researcher at the University of Economics and Law of HCM City, was concerned that the total retail sale of consumer goods and services in the city was dropping steadily in Q 四 shortly after reaching its pre-pandemic levels.
More specifically, the researcher revealed that current customer purchasing power was falling short of levels in 二0 一 九 by 二0 per cent. Weakening demand could be observed in key industries including food, construction materials, and educational goods.
In face of the situation, she urged the Government to extend the VAT cuts to late 二0 二 三 to give a bigger push to domestic demand. She said the road to recovery would be tougher should such an extension be not approved.
Over the year, the VAT cuts were widely regarded among firms as a timely policy that gave fresh impetus to their post-pandemic recovery, stablised prices, and stimulated domestic demand.
Thanks to the cuts, Việt Nam's annual consumer price index grew by just 三. 一 五 per cent in 二0 二 二 despite mounting fuel prices, well under the target set by the National Assembly. —VNS
