From July 15, businesses are entitled to discounts of up to 100% on goods prices.

Decree 81 detailing the Commercial Law on trade promotion activities has just been issued by the Government, detailing the limits of promotions and discounts on goods and services. Accordingly, in case of organizing concentrated promotional programs (hours, days, weeks, months, promotional seasons, discounts), promotions and discounts of up to 100% of the value of goods and services are allowed.

The 100% discount and promotion limit is also applied to promotional activities within the framework of programs and trade promotion activities decided by the Prime Minister.

This Decree takes effect from July 15.

Experts say that the current regulations on price ceilings are no longer suitable for the market economy.

Except for the above cases, the promotional and discount limit must not exceed 50% of the price of the promoted goods and services before the promotional period.

According to this Decree, the maximum discount limit does not apply when implementing price promotions for goods and services when implementing the State's price stabilization policy. In addition, it does not apply to fresh food products; goods and services in cases where enterprises dissolve, go bankrupt, or change locations, production and business lines.

The new regulation is considered a major change compared to the current regulation and the draft. The previous draft proposed a maximum discount of 70% in cases of promotions under concentrated programs organized by the State, or regulated by the Government or provincial People's Committees.

For other promotional cases, the maximum limit is still maintained at 50% as present.

According to businesses, the maximum limit of 50% is unreasonable and impractical, but has existed for more than 10 years. This regulation is a "golden hoop" that forces businesses to not sell goods to recover capital, in times of economic difficulty, low consumer purchasing power, high inventory, and stagnant cash flow. Meanwhile, management agencies have difficulty in enforcing it.

In fact, in many industries such as information technology or fashion, products and designs are constantly changing. However, if a business wants to sell its inventory at a price 50% cheaper to clear out all the stock, it cannot do so because “regulations do not allow it”.

Experts also said that the current regulation on price ceilings is no longer suitable for the market economy.

In fact, promotions have a positive effect on business operations. Especially when a new business does not have many customers, it is necessary to promote to make customers aware instead of advertising which costs more. The ban on discounts of more than 50% hinders new businesses from entering the market.

On the other hand, the promotional ceiling also hinders the ability of businesses to recover capital in many cases, limiting the flexibility of traders in terminating their business and switching to other fields.