After the Government on June 30 issued Decree No. 44/2023/ND-CP on reducing the value added tax (VAT) in line with the National Assembly’s Resolution No. 101/2023/QH15 dated on June 24, 2023, many businesses and retail systems across Da Nang have adjusted the prices of goods in accordance with the new policy in order to increase purchasing power and stimulate shopping demand in the locality.

Businesses and retail systems have adjusted the prices of goods in accordance with the new policy along with many attractive promotions in a bid to stimulate shopping demand. IN PHOTO: Visitors at the GO! Danang supermarket. Photo: V.H

Purchasing power expected to increase

Under the aforementioned Decree, the VAT cut by 2% is applied to goods and services which are currently subject to a tax rate of 10%, except for those belonging to the groups of telecommunications, financial and banking activities, securities, insurance, real estate business, metal and cast metal products, products of mining (except for coal), coke, refined petroleum, and chemical products.

This is the second time that VAT has been reduced by 2% synchronously in the stages of importing, producing, processing, and trading the eligible goods and services. This has a direct effect on helping consumers save money and stimulate reinvestment in production and business.

According to recent surveys, retailers and distributors citywide started to carry out many attractive promotion programmes to stimulate the shopping demand of consumers as soon as the 2% VAT reduction took effect from July 1, 2023.

At Saigon Co.op's retail systems such as Co.opmart, Co.opXtra and Co.op Food, besides the usual discounts, the units have added a 2% tax reduction to goods.

Director of the national Co.opmart supermarket chain Nguyen Ngoc Thang acknowledged that the reduction in goods prices was in response to the policy of recovering and rapidly developing production business, creating a growth engine for some businesses, and important industries and sectors, and sharing spending pressure with consumers.

Meanwhile, the GO! supermarket is offering up to 50% off on more than 25 products of regional fruits, fresh foods and housewares.

Mrs. Nguyen Thi Bich Van, Communications Director of the Central Retail Group - the owner of GO!, Big C, Top Market supermarket systems, said that since early July, 2023, visitors to GO!, Big C, and Tops Market supermarkets nationwide can check the new VAT information on invoices.

Mrs. Vo Thi Thu Thuy, Director of the GO! Da Nang supermarket informed that the Government's VAT reduction in 2022 has helped supermarkets boost consumer demand and reduce people's shopping costs. As for the VAT reduction policy, starting from July 1, the supermarket has carefully deployed many discount and promotion programmes for its system nationwide.

Active support from local residents and businesses

Mr. Duong Hien Tu, Director of the An Phu Farm Company Limited, analysed that in 2022, when applying the 2% VAT reduction policy, about 30% of the list of goods at the An Phu Farm supermarket system had prices reduced, thereby increasing the purchasing power by 5-10%.

To support businesses as well as people to benefit from the State's policy, Deputy Director of the municipal Tax Department Truong Cong Khoai said, in 2022, right after the National Assembly issued Resolution 43/2022/QH15 on fiscal and monetary policies to support the socio-economic recovery and development, the agency issued documents guiding the steps to determine the list of products that need to look up the code of goods and services; identify goods and service codes; and compare codes of goods and services to determine VAT rates.

According to the municipal Tax Department, the collection of VAT is estimated to decline by VND 220 billion due to the implementation of Decree No. 44.

Reporting by M.QUE, V.HOANG - Translating by M.DUNG