Ho Chi Minh City Customs Department proposed that the Ministry of Finance advise the Government to apply a reduction in the Value Added Tax (VAT) rate by 2% for all groups of goods and services currently subject to the 10% VAT rate, to be uniform at the stages of import, production and consumption.
According to Ho Chi Minh Customs Department, during the implementation of the Decree on VAT reduction, a number of difficulties and problems arose related to identifying and distinguishing goods and services that are not eligible for VAT reduction from goods that are subject to VAT reduction.
In order to to know whether they can apply the 2% VAT rate reduction or not, customs officials must base on and refer to the guiding documents of relevant ministries to make a decision, because goods must base on the physical and chemical properties and technical characteristics of the goods to differentiate. However, some new products do not have specific guidance documents from ministries, leading to inconsistent application and not really creating favorable conditions for businesses.
According to Ho Chi Minh Customs Department, in the context when the world and domestic economy are facing many difficulties and challenges, reducing VAT is one of the measures for the Government to share and accompany businesses and consumers, contribute to stimulate consumption, reducing prices of goods and services, and reducing production costs, thereby they can promote production and business, increase competitiveness, increase consumption of goods and create more jobs, and also contribute to generate more revenue for the government budget.