HA NOI (VNS) — The Ministry of Finance has rejected calls by some National Assembly deputies to reduce value added tax (VAT), saying that such a measure would be unreasonable.
The issue was raised at the ongoing National Assembly meeting.
Some deputies said a cut to VAT from the current 10 per cent to 5 per cent would boost consumption and spark an economic revival.
The ministry replied that a reduction would not help enterprises cut costs, as VAT taxes consumers and not producers.
They added that the current 10 per cent rate was already low compared to other countries.
Statistics on VAT levels in 112 countries worldwide show that 88 impose a VAT of 12-25 per cent, while the remainder ask for 10 per cent.
The ministry also pointed out that no country had waived or reduced VAT as a response to the global economic crisis.
"Measures to reduce VAT for a set amount of time will not significantly support enterprises," a ministry spokesman said.
"And State authorities cannot control the decline of product prices." — VNS