Key highlights
- VAT slash would be implemented on a number of goods and services to boost the Vietnamese economy after exports of $371.85 billion in 2022.
- One of two options considered is slashing 2 percent off the current 10 percent VAT on a number of goods and services
- President of the Chartered Institute of Taxation of Nigeria (CITAN), Mr. Adebayo Adesina, urged the incoming government to give more emphasis on indirect taxes to achieve the 10% VAT increase.
One of the world’s major exporters of manufactured goods, Vietnam announced it is considering reducing its value-added tax (VAT) from 10 percent to 8 percent for a number of goods and services to boost the economy.
This comes after Nairametrics reported that Tax experts in Nigeria said the incoming administration would have to follow adopt the federal government’s proposed increase in Value Added Tax (VAT) from the current 7.5% to 10% to reduce the country’s borrowing.
Vietnam Finance Ministry reported that its VAT cuts include 2 options, which includes a total slash on good and services, or some excluded goods.
2% slash
Local media reported that the Vietnamese Finance Ministry plans to slash VAT from 10 percent to 8 percent for a number of goods and services to boost the economy, with 2 options available, the report said:
- “One of two options considered is slashing 2 percent off the current 10 percent VAT on a number of goods and services.
- “The second one is also slashing 2 percent off the current 10 percent VAT but that would exclude goods and services that were already under the effect of a previous VAT reduction as part of a government’s policy to boost economic recovery after COVID-19.
Necessity
The report added that business leaders in Vietnam asked for additional support from the government to help speed up economic recovery due to increased global economic shocks.
The Ho Chi Minh City Food and Foodstuff Association said businesses had been struggling with rising interest rates, poor liquidity, increased risk in the bond and stock markets, and higher input and logistics prices, the newspaper reported.
Meanwhile, Vietnam Beverage Association urged the government to extend the policy at least until the end of 2023, saying while there has been some improvement in recent months it will take a long time for the beverage industry to fully recover after the pandemic.
Vietnam’s reported total exports in 2022 rose 10.6% to $371.85 billion.
Contrast with Nigeria
Nairametrics reported recently that the President of the Chartered Institute of Taxation of Nigeria (CITAN), Mr. Adebayo Adesina, urged the incoming government to give more emphasis on indirect taxes to achieve the 10% VAT increase.
“Indirect taxes are the way to go if the government is expected to enhance its revenues. It is a type of tax that is often paid for goods and services without being aware that it is being deducted,” Adesina said.
He said that the incoming government should continue to educate the citizenry on the importance of paying taxes for the growth of the economy.
“Payment of taxes is crucial for our development in order to address competing needs of the society. Also, the authorities need to show more transparency and accountability to encourage more citizenry to pay their taxes as it is a social contract between the government and the people,” he added.
