Vietnamese lawmakers say 'no' to VAT reduction for real estate, banking sectors

By Huong Dung
Sat, May 13, 2023 | 7:19 pm GMT+7

The Standing Committee of the National Assembly, Vietnam's legislative body, has disagreed with the government's proposal to reduce value added tax (VAT) for the banking, securities, real estate, and insurance sectors.

At a working session on Saturday, the committee said VAT should be cut from 10% to 8%, but not applicable to the four sectors, like what was done in 2022.

The government had proposed a VAT reduction from 10% to 8% for all goods and services, effective until the end of 2023, to help businesses recover from the pandemic.

In addition, business establishments, including households and individuals, will enjoy a 20% cut in the percentage of goods for VAT calculation when issuing invoices for all goods and services subject to this tax, Minister of Finance Ho Duc Phoc said while presenting the proposal.

The Ministry of Finance estimates budget losses of VND5.8 trillion ($247 million) per month and VND35 trillion ($1.49 billion) in the last six months of this year if the tax is cut.

National Assembly Chairman Vuong Dinh Hue (middle) oversees the NA Standing Committee's working session on May 13, 2023. Photo courtesy of the government portal.

National Assembly Chairman Vuong Dinh Hue (middle) oversees the NA Standing Committee's working session on May 13, 2023. Photo courtesy of the government portal.

Nguyen Van Chi, vice chairperson of the National Assembly's (NA) Finance and Budget Committee, said that her committee does not agree with a 2-percentage-point VAT reduction for all goods and services.

The VAT reduction should be the same as last year under the NA’s Resolution 43 dated January 11, 2022 which stated that the securities, real estate, banking, and insurance sectors are not included in the list of beneficiaries to a 2-percentage-point VAT cut.

“This approach would result in a reduction of approximately VND9 trillion ($383.6 million) in budget losses as compared to the option of easing the tax for all goods and services,” Chi said.

Speaking at the event, NA Chairman Vuong Dinh Hue said that the tax reduction should be applied to specific goods and services as stated in Resolution 43, as it was carefully evaluated and is conducive to the government's policy implementation. The policy would be effective from July 1 to December 31, 2023.

He noted that the tax reduction should not lead to a decrease in revenue and increase budget overspending this year in order to ensure the national financial safety.

"Lowering VAT is to stimulate consumer demand and benefit people and businesses, but it should not reduce the budget. If the tax reduction affects budget targets, the National Assembly will not agree," he opined.

Echoing the top legislator’s view, chairman of the NA’s Economic Committee Vu Hong Thanh asked for careful consideration of VAT reduction for all goods and services, expressing concerns over budget deficit.

In conclusion, the NA Standing Committee agreed to include the VAT reduction proposal in the legislature’s law and ordinance building program for 2023, which will be submitted to the legislative body for consideration during its fifth session, scheduled to open on May 22.

Comments (0)
  • Read More
Thailand SCG to invest $700 mln more in $5 bln petrochemicals complex in Vietnam

Thailand SCG to invest $700 mln more in $5 bln petrochemicals complex in Vietnam

Thailand’s Siam Cement Group (SCG) will invest $700 million more in the $5.2 billion Long Son Petrochemicals Complex (LSP) in Vietnam’s southern province of Ba Ria-Vung Tau to diversify its production.

Industries - Fri, November 1, 2024 | 10:20 am GMT+7

Vietnam manufacturing activity rebounds, recovering from typhoon Yagi

Vietnam manufacturing activity rebounds, recovering from typhoon Yagi

The Vietnamese manufacturing sector in October started to recover from the effects of September's super typhoon, recording renewed increases in both output and new orders.

Economy - Fri, November 1, 2024 | 8:34 am GMT+7

Vietnam private lender VietBank logs 96% profit growth in 9 months

Vietnam private lender VietBank logs 96% profit growth in 9 months

Vietnam Thuong Tin Commercial Joint Stock Bank (VietBank) posted a 96% year-on-year surge in pre-tax profit in the first nine months of 2024 to reach VND820.4 billion ($32.46 million), or 78% of the year's target.

Banking - Fri, November 1, 2024 | 7:45 am GMT+7

Maersk opens its first bonded warehouse in Vietnam

Maersk opens its first bonded warehouse in Vietnam

Denmark's integrated transport and logistics giant A.P. Moller - Maersk (Maersk) on Thursday opened its first bonded warehouse in Vietnam at SLP Park, Nam Dinh Vu Industrial Park in Hai Phong city.

Industries - Thu, October 31, 2024 | 11:44 pm GMT+7

ABBank incurs $14 mln loss in Q3

ABBank incurs $14 mln loss in Q3

Hanoi-headquartered An Binh Commercial Joint Stock Bank reported a pre-tax loss of VND343.5 billion ($13.59 million) in the third quarter of this year, while some other private Vietnamese banks posted strong profits.

Banking - Thu, October 31, 2024 | 9:29 pm GMT+7

Vietnam’s emergence as regional manufacturing hub a significant logistics opportunity: SuperPort exec

Vietnam’s emergence as regional manufacturing hub a significant logistics opportunity: SuperPort exec

Southeast Asia’s rise as a vital logistics hub with Vietnam positioned as a key manufacturing center presents a significant business opportunity, says Yap Kwong Weng, CEO of Vietnam SuperPort.

Companies - Thu, October 31, 2024 | 9:01 pm GMT+7

Indonesia steps up support for textile industry

Indonesia steps up support for textile industry

Indonesia’s President Prabowo Subianto held a close-door meeting with several ministers on Tuesday to discuss the current situation of Indonesia's textile industry, particularly focusing on textile giant Sri Rejeki Isman (Sritex).

Southeast Asia - Thu, October 31, 2024 | 6:01 pm GMT+7

Thailand speeds up plans to construct six new airports

Thailand speeds up plans to construct six new airports

Thailand’s Transport Ministry is accelerating development and construction projects on six airports with an aim to become the region's transportation hub.

Southeast Asia - Thu, October 31, 2024 | 6:00 pm GMT+7

Thailand develops eco-friendly seaport model

Thailand develops eco-friendly seaport model

Thailand is striving to implement environmental protection and social sustainability solutions in developing the country’s major infrastructure projects, such as the development of Phase 3 of Laem Chabang Port, Thailand's only deep-sea port.

Southeast Asia - Thu, October 31, 2024 | 5:58 pm GMT+7

Indonesia intensifies oil palm cultivation to meet biodiesel demand

Indonesia intensifies oil palm cultivation to meet biodiesel demand

Indonesia is expanding its oil palm cultivation to increase crude palm oil (CPO) production as a raw material for 50% biodiesel (B50), according to the country’s Ministry of Agriculture.

Southeast Asia - Thu, October 31, 2024 | 5:56 pm GMT+7

Malaysia’s first domestic EV model opens for booking

Malaysia’s first domestic EV model opens for booking

The Malaysian multinational automotive company Proton's first electric vehicle (EV), the e.MAS 7, is now open for booking.

Southeast Asia - Thu, October 31, 2024 | 5:54 pm GMT+7

Thailand aims to become emerging leader in AI

Thailand aims to become emerging leader in AI

Thailand is positioning itself as an emerging leader in artificial intelligence (AI) regulation and development, thanks to policies that support an approach that balances technological innovation with ethical considerations and workforce protection.

Southeast Asia - Thu, October 31, 2024 | 5:53 pm GMT+7

Vietnam PM calls for more investment from Qatar’s $475 bln sovereign wealth fund

Vietnam PM calls for more investment from Qatar’s $475 bln sovereign wealth fund

Vietnamese Prime Minister Pham Minh Chinh has called on the Qatar Investment Authority (QIA), Qatar's sovereign wealth fund with total assets amounting to $475 billion as of 2023, to ramp up its investment in Vietnam.

Industries - Thu, October 31, 2024 | 4:43 pm GMT+7

FPT Retail earns $6.5 mln in Q3 profit, to expand FPT Shop chain

FPT Retail earns $6.5 mln in Q3 profit, to expand FPT Shop chain

Vietnamese retail major FPT Retail made a profit after tax of VND165 billion ($6.52 million) in the third quarter of this year, while it incurred a loss of VND13 billion ($514,000) in the same period last year.

Companies - Thu, October 31, 2024 | 3:56 pm GMT+7

Germany’s PNE opens rep office for $4.6 bln offshore wind project in central Vietnam

Germany’s PNE opens rep office for $4.6 bln offshore wind project in central Vietnam

Germany’s PNE AG, a leading developer of renewable energy projects, has shown its determination to proceed with a mega offshore wind power project in central Vietnam by opening a representative office there.

Energy - Thu, October 31, 2024 | 2:43 pm GMT+7

Saudi Arabian energy giant ACWA Power ready to invest $5 bln in Vietnam

Saudi Arabian energy giant ACWA Power ready to invest $5 bln in Vietnam

Saudi Arabian private energy giant ACWA Power stands ready to invest up to $5 billion in Vietnam, a senior executive said Wednesday.

Industries - Thu, October 31, 2024 | 2:39 pm GMT+7