From November 1 to the end of December 31, 2021, value-added tax in some areas will be reduced by 30% according to Resolution 406 of the National Assembly Standing Committee on a number of solutions to support businesses and people affected by the epidemic. Covid-19.
As a result, the prices of these products and services will decrease, affecting demand in the last 2 months of the year.
Reduce taxes, pull prices down
A number of goods and services eligible for tax reduction include transportation services (railway, waterway, aviation, road, passenger transport), accommodation, food and beverage services, and services of travel agents. tourism, business tours and support services, promotion and organization tours. Along with that are publishing products and services; cinematographic services, television program production, sound recording and music publishing; works artand creative, artistic, entertainment services; services of libraries, archives, museums and other cultural activities; sports, entertainment and entertainment services (excluding publishing software and goods and services produced and traded in the form of online).
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Value-added tax (VAT) pulls the price of goods down. For example, transportation service costs 20 million VND, VAT in this field is 10%. According to current regulations, VAT is 2 million VND. Now reduced by 30%, equivalent to 600,000 VND, the tax payable is only 1.4 million VND. Thus, the total payment value is 21.4 million VND instead of 22 million VND as before. As for the units that calculate VAT according to the percentage method on revenue, the reduced tax amount will be clearly shown on the invoice. For example, the price of a hotel stay for 2 days is 3 million VND (1.5 million VND per day), VAT in this area is 5%, equivalent to 150,000 VND, 30% off, or 45,000 VND. Therefore, reducing VAT will directly benefit consumers.
To avoid taking advantage of this policy, Mr. Nguyen Duc Huy, Deputy Chief of the Office of the General Department of Taxation, said that recently, the General Department of Taxation has issued a document guiding the implementation of Resolution 406, which requires provincial tax departments to , the city creates favorable conditions for businesses (DN), organizations and people, and at the same time is responsible for checking and supervising the selling prices of goods and services (prices excluding VAT) from November 1 of each city. Businesses and organizations in the area to achieve the goal of consumers benefiting from the tax reduction. In case of detecting the phenomenon of taking advantage of state policies to increase the selling price of goods and services eligible for tax reduction, local agencies should promptly advise the People’s Committee of provinces and cities to take measures to handle. Submitting the previous draft Resolution 406, the reduction of VAT applied from September 1 to December 31, 2021 could reduce state budget revenue by about VND 6,600 billion.
