HÀ NỘI — Representatives of five agricultural associations have recently sent a written petition to the National Assembly (NA), expecting the NA to approve amendments proposed by the Government on the Law on Value Added Tax (VAT) to ease their business performance.

According to the associations, which are representatives for businesses in the rice, coffee, pepper, wood and seafood industries with high export value of billions of US dollars, the VAT Law, effective from July 1, applies a ‘pay first refund later’ mechanism on VAT, causing major difficulties for the business community.

In particular, in the agriculture, forestry and fisheries industry, the VAT policy for unprocessed products such as rice, seafood, coffee, pepper, wood and forestry products is becoming a significant barrier as it causes capital costs to increase and reduces cash flow of businesses, affecting the competitiveness and sustainable development of the industries.

Previously, the associations had reflected the shortcomings to the Government and following the request, the Government submitted a VAT draft law amending and supplementing a number of articles of the VAT Law to the NA for consideration and approval at its ongoing meeting.

"The associations expect the NA’s leaders for consideration and approval of the amendments of the 2024 VAT Law to facilitate and support the agricultural sector to overcome difficulties in VAT policy, continuing to contribute to the development of the country's economy," the associations state in the petition.

According to the Ministry of Finance, there is a situation that the collection of VAT and then refund it for catfish, pepper and coffee export goods causes a waste of time, money and capital stagnation of enterprises while credit institutions do not disburse this tax value when providing working capital. It causes financial pressure and reduces business efficiency.

The tax value, which temporarily collects and then refunds, is estimated at about VNĐ4 trillion for rice businesses; VNĐ2.16 trillion for pepper and spices businesses; and VNĐ10 trillion for coffee businesses yearly.

Previously, the Vietnam Chamber of Commerce and Industry (VCCI) also reflected on many difficulties in the VAT policy that are seriously affecting agricultural enterprises.

Under a written submission to the Prime Minister, VCCI said that after more than three months of implementing the VAT Law, it received many reflections from key agricultural associations about major difficulties arising in practice, seriously affecting cash flow, competitiveness, ability to maintain supply chains and export market share of Vietnamese agricultural products. — BIZHUB/VNS