VAT will be reduced by 2% until the end of this year, and Vietnam Airlines will be extended debt repayment

On the morning of June 29, the National Assembly voted to pass the Resolution of the 7th session, with nearly 95% of delegates in favor. In particular, the National Assembly decided to extend the application of the 8% VAT, a 2% reduction compared to the current rate, until the end of this year.

Similar to previous times, the 2% VAT reduction applies to some groups of goods and services. Sectors that continue to not receive this tax reduction include real estate, securities, banking services, telecommunications, information technology, coke, chemical products, goods and services subject to special consumption tax. special.

Reducing VAT by 2% will help people save money on spending and living expenses, creating a psychological impact, helping to stimulate demand and increase consumption, according to experts.

Extending the 2% tax reduction period until the end of this year is expected to reduce budget revenue in the second half of this year by about 24,000 billion VND (equivalent to 4,000 billion VND a month). Overall, the budget is estimated to decrease by nearly 47,500 billion VND for the whole year.

The National Assembly assigned the Government to ensure revenue sources so as not to affect the budget estimates, expenditures, budget deficits and urgent needs arising when further reducing this tax.

Also according to Resolution of the 7th session, Vietnam Airlines is granted an extension to repay the refinancing loan.Specifically, the State Bank is automatically granted three more extensions when the debt repayment deadline for the national airline’s VND4,000 billion loan comes due, to overcome immediate difficulties.

Each renewal period is equal to the initial refinancing term. The total duration of refinancing extensions is maximum 5 years (including 2 times extended according to Resolution 135 of the National Assembly).

The National Assembly requires the Government to clearly define the responsibilities of agencies and organizations in implementing commitments on the effectiveness of this loan repayment extension. The Government needs to accelerate the comprehensive restructuring of Vietnam Airlines and soon complete the overall project of solutions to overcome difficulties so that this airline can soon recover.

Previously, from July to the end of 2021, Vietnam Airlines used this VND4,000 billion loan package. This is a solution to support liquidity for the national airline due to the impact of Covid-19, along with VND8,000 billion to increase charter capital through issuing shares to existing shareholders.

By the end of last year, the company paid 220 billion VND in loan interest to banks. According to Resolution 135 of the National Assembly and credit contracts, Vietnam Airlines is obligated to pay the entire principal balance from July to December 2024.

This year, Vietnam Airlines targets parent company revenue at 80,984 billion VND, consolidated revenue at 105,946 billion VND. The company also plans to divest capital at Tan Son Nhat Cargo Services Co., Ltd. (TCS) this year, helping to bring in about VND 1,700 billion. Thanks to this deal and the improved profits of other subsidiaries, the company sets a consolidated profit target of over 4,230 billion VND.