Businesses concerned over removal of VAT exemptions

Friday, Jun 21, 2024 13:57

Containers being loaded into ships at the Gemalink Port in the southern province of Bà Rịa-Vũng Tàu. —VNA/VNS Photo

The abolition of the 0 per cent value-added tax for export products and services will likely raise product costs and reduce Vietnamese products’ ability to compete internationally, said industry insiders.

The concern was raised by businesses about the scope of the draft VAT law, which has been discussed on the floor of the National Assembly this week.

Bùi Ngọc Tuấn, Deputy Director General of Tax Advisory Services at Deloitte Vietnam said for many, costs may go up as much as 6 per cent, on top of increased expenses on administrative procedures for tax refunds.

He added it took some businesses nearly two years to complete tax refunds, which was “a very, very long time” and has greatly affected their financial performance and cash flow.

"For medium-sized export manufacturing companies in Việt Nam, the absolute figure for additional input VAT could reach tens of millions of USD per year, not to mention the complications during tax refund procedures," he said.

Economists said careful consideration is required to ensure balance among the interests of investors, the economy and the government and that implementation must also be gradual to avoid negative responses from investors. — VNS

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