National Assembly discusses amendments to Law on Value Added Tax

Continuing the 5th Session of the 13th National Assembly, on the afternoon of May 28, National Assembly deputies discussed the draft Law amending and supplementing a number of articles of the Law on Value Added Tax.

National Assembly Delegate of Bac Kan province Duong Quang Son spoke about the draft Law amending and supplementing a number of articles of the Law on Value Added Tax.
(Photo: Duong Giang/VNA)

Discussing at the Hall of the Draft Law on amending and supplementing a number of articles of the Law on Value Added Tax, delegates basically agreed on the necessity of promulgating the Draft Law on amending and supplementing a number of articles of the Law on Value Added Tax, in order to promptly overcome the limitations of the current Law, ensure the unity and synchronization of the legal system, and facilitate the implementation process.

Regarding the issue of reducing output value-added tax on housing sales, rentals, and hire-purchases, delegate Tran Van Huynh (Kien Giang) agreed with the provisions of the draft law and said that reducing output value-added tax by 50% for these subjects will contribute to removing difficulties for the real estate market, supporting subjects with real housing needs, stimulating consumption, and reducing inventory in the real estate sector.

However, delegates are concerned that reducing output value-added tax on the sale, lease, and hire-purchase of apartments with a floor area of ​​less than 70 square meters and a selling price of less than VND15 million/square meter may lead to the division of apartment floor areas, disrupting planning, design, and architecture; increasing population density and affecting urban traffic.

The draft law adds regulations on the threshold for value-added tax registration using the deduction method. Accordingly, the deduction method will be applied to operating businesses with annual revenue from selling goods and providing services of VND1 billion or more. Delegate Tran Van Huynh suggested that it is necessary to consider regulating a lower taxable revenue threshold than the Government's proposed plan because with a revenue of VND1 billion/year, the number of businesses subject to the direct calculation method is quite large.

On the other hand, there has not been any progress in the management and application of value added tax because in Vietnam, value added tax has been applied for a long time, but the subjects applying the direct calculation method still account for a large proportion, not meeting the goal of "moving towards basically implementing the tax deduction method" set out in the Tax Reform Strategy.

According to delegate Do Van Ve (Thai Binh), the reality shows that all businesses currently apply the tax deduction method. However, each business has different levels and capacities, and micro-enterprises applying the deduction method often face difficulties and complications, and incur high costs in tax declaration procedures. The delegate suggested that there should be simple tax collection measures for this group.

Regarding the non-taxable subjects, delegate Nguyen Thanh Hai (Hoa Binh) said that the number of 25 groups of subjects exempted from value added tax as in the draft Law is still large, not consistent with the Tax Reform Strategy. The delegate cited the objectives set out in the Tax Reform Strategy for the 2011-2020 period, one of the reform contents, amendments and supplements towards reducing the group of goods and services not subject to value added tax...

Sharing the same view, delegate Le Minh Hien (Thai Binh) said that giving priority to more subjects not subject to value added tax will make it more difficult for businesses to sell goods, and will not bring any incentives to businesses...

According to the program, the Draft Law amending and supplementing a number of articles of the Law on Value Added Tax will be voted on and approved by National Assembly deputies at this session.

Also on the afternoon of May 28, the National Assembly heard the Presentation and Report on the Review of the draft Law on Plant Protection and Quarantine./.

According to (TTXVN) - LT