Potential Impacts of Proposed 5% VAT Rate on Fertiliser for Vietnamese Farmers

• National Assembly Standing Committee fixed a 5% VAT rate on draft amendments to existing VAT law
• Draft amendments include applying 5% VAT rate to fertiliser and iron used for fertiliser production
• Fertiliser producers currently face difficulties due to not being able to deduct VAT for input goods and services
• Lawmakers are concerned about negative impacts on farmers and agricultural production if 5% VAT rate is applied to fertilisers
• Suggestions made to consider moving fertilisers to non-VAT category to avoid burdening consumers, especially farmers
• Applying 5% VAT rate on fertilisers could increase budget by $175 million a year, but concerns remain about impact on farmers and agricultural competitiveness

Source: vir.com.vn

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---