After the Government has agreed to extend the cut in value-added tax (VAT) from 10% to 8% on specific groups of goods and services until the end of the year, many retail businesses and systems have adjusted commodity prices and launched promotion programmes in a bid to increase people's purchasing power and boost production and business activities.

People shopping for goods at the GO Supermarket! Da Nang. Photo: V.HOANG

Price reduction expects for increasing purchasing power

The VAT reduction (latest issue under Decree No 72/2024/NĐ-CP) to 8% from 10%, has been in place since 2022, aimed at promoting domestic consumption and production following the COVID-19 pandemic and global slowdown. It is not applicable to such services and products as telecommunications, finance, banking, security, insurance, real estate business, coke and chemical products, and goods and services subject to special consumption tax.

This is the 4^th time VAT has been reduced by 2% uniformly from import, production, processing and consumption, having a direct effect on helping consumers save money on shopping and helping stimulate reinvestment in production and business activities.

Through the survey, retail systems and distributors continue to deploy many attractive discount programmes to stimulate shopping demand.

Ms. Nguyen Thi Bich Van, Communications Director of Central Retail Group in Viet Nam, said that retail systems under Central Retail Group including GO!, Big C, Tops Market and Nguyen Kim continued to apply the 2% VAT cut, bringing direct benefits to shoppers.

Mr. Phan Thong, Director of the Co.opmart Da Nang supermarket, acknowledged that the VAT reduction will actively support businesses in tax deferral and reduction. This is a condition to reduce costs and improve wages for workers.

He added that the cut will be opportunities for businesses to bring goods to market, increase purchasing power, and promote production and businesses at the end of the year when many trade promotion events and shopping stimulation programmes will take place. The VAT reduction will directly impact customers' consumption budgets. Retailers, especially distribution systems, are also ready to deploy solutions on the system for goods that will receive tax reduction.

Mr. Thong also proposed that relevant authorities need to deploy technical solutions and apply information technology to simplify procedures for quick deployment of the policy to retailers and consumers nationwide.

Dual benefits for people and businesses

The VAT reduction policy not only benefits production and business units but also consumers because the prices of goods and services are reasonable and economically appropriate for many families.

Mrs. Phan Thi Hanh, a resident of Thanh Khe Dong Ward, Thanh Khe District, said she had just purchased an air conditioning fan at a price reduced by VND 200,000 compared to 10 days ago thanks to the VAT reduction policy being maintained from now until the end of the year and the electronics supermarket-launched shopping stimulus programme.

Mr. Luu Duc Sau, Deputy Director of the Da Nang Tax Department, highlighted the importance of the VAT reduction policy for people and businesses, as well as its positive impact on the recovery of consumption, production and business.

Accordingly, the increase in people's shopping spending will help businesses overcome difficulties, expand production and business, and promote the city’s economic recovery and growth.

As soon as there was information about the VAT reduction policy, the local Tax Department has promoted propaganda of new tax policies in many appropriate and accessible forms, so that people and businesses could understand and benefit promptly.

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