According to Mr. Phung, the word "only" should be removed in the phrase "... Business establishments that only produce goods and provide services subject to a 5% value-added tax rate, if they have input value-added tax that has not been fully deducted from VND 300 million or more after 12 months or 4 quarters, will be refunded value-added tax".
Recently, in the Report of the Ministry of Finance sent to the Government in the project to amend the Law on VAT, in Clause 3, Article 15 of the Draft - Cases of tax refund stated: "... Business establishments that only produce goods and provide services subject to the value added tax rate of 5%, if the input value added tax amount that has not been fully deducted is three hundred million VND or more after 12 months or 04 quarters, will be refunded the value added tax".
Mr. Nguyen Van Phung analyzed that according to this regulation, it can be understood that enterprises with only one VAT rate of 5% will be refunded, while enterprises with two or more VAT rates will not be refunded. This is unfair to enterprises with two or more VAT rates.
As a tax expert, Mr. Phung said that in reality, enterprises are free to do business, so most enterprises operate in multiple industries, very few enterprises only produce in one field subject to 5% VAT. Therefore, amending the VAT law needs to ensure fairness for enterprises in the same industry producing goods and providing services subject to 5% VAT...
For example, company A is a fertilizer manufacturer and chemical trader. If fertilizers are subject to 5% VAT and chemicals are subject to 10% tax, company A will not be refunded. Meanwhile, company B only produces fertilizers and does not do business in other industries, but is refunded. This would be unfair to other businesses in the same industry.
Therefore, the term "only" will limit the subjects eligible for tax refunds and does not ensure fairness for businesses in the same industry that produce goods and provide services subject to 5% VAT...
Therefore, Mr. Phung proposed to remove the word "only" in the phrase "... Business establishments that only produce goods and provide services subject to the 5% VAT rate, if the input VAT amount that has not been fully deducted is three hundred million VND or more after 12 months or 04 quarters, will be refunded VAT".
"This will satisfy the policy requirements and the interconnected nature of VAT. I will also have a written proposal to the National Assembly Standing Committee on this issue" - with the passion of a person who has "worked" in Taxation all his life, Mr. Phung emphasized.
It must be explained to farmers that applying 5% VAT will benefit the people, not that the price of fertilizer will increase by 5%.
According to Mr. Phung, our mistake was that in 2014 we did not have enough information and data to report to the National Assembly that fertilizers subject to a 5% tax are better than those not subject to tax. Instead, a low VAT at a moderate level would be much more beneficial than moving them to the group of subjects not subject to VAT. The past ten years have given us the whole picture.
"I propose that the Fertilizer Association arrange a meeting so that I can provide information on how the budget revenue, input, output, and selling price will be if a 5% VAT is applied. We also have the opportunity to reduce prices for farmers, because input is deductible and output is traded with the world. At the same time, we must explain to farmers that applying a 5% VAT is for the benefit of the people, not that the price of fertilizer will increase by 5%. We propose that businesses keep the price the same or lower the selling price for farmers," Mr. Phung affirmed.
