In fact, when value added tax is not applied, fertilizer prices still increase. Therefore, fertilizer prices do not depend on value added tax but mainly on the supply and demand market.
Clarifying the opinions of National Assembly delegates discussed at the National Assembly hall on the morning of October 29 about the Law on Value Added Tax (amended), Deputy Prime Minister, Minister of Finance Ho Duc Phoc emphasized, the Law on Value Added Tax Added value is extremely important, affecting most production and business activities of enterprises and business households. Many contents must be changed in accordance with the operation of the economy and society.
In response to many delegates’ concerns about value-added tax on fertilizers, the Deputy Prime Minister and Minister said that previously, the value-added tax on fertilizers was 5%. After many comments, the National Assembly issued Law No. 71/2014/QH13 in 2014, effective from 2015 until now, stipulating that fertilizers are not subject to value added tax.
Currently, the ministries: Agriculture and Rural Development, State Audit and Fertilizer Association, National Assembly delegations: Bac Giang, Ca Mau, Binh Dinh, Hai Phong, Nam Dinh… propose to amend the content. this content. The 5th session of the 15th National Assembly also included this item in review.
Regarding fertilizer prices, the Deputy Prime Minister and Minister said that fertilizer prices do not only depend on tax increases or decreases but also on production costs, markets, labor, labor productivity, and modernization. , especially supply and demand. If all these costs can be fixed, it will be possible to evaluate whether the tax increases or decreases fertilizer prices.
Deputy Prime Minister and Minister further informed that when implementing no value added tax on fertilizers, in the period 2018-2022, urea fertilizer prices still increased by 19.71% – 43.6%. In 2023, urea nitrogen prices will increase by 6.29%-6.4% due to the Russia-Ukraine war, increasing demand but low supply. Thus, fertilizer prices basically depend on the supply and demand market.
In terms of business benefits, collecting value-added tax will increase prices, but mainly import prices. Therefore, domestic businesses will benefit and increase their competitiveness. According to calculations, when applying tax as proposed, foreign businesses must pay 1,500 billion VND but domestic businesses only pay 200 billion VND. Thus, good benefits for domestic businesses, creating conditions for domestic businesses to improve techniques, apply modern technology, reduce product costs, thereby reducing selling prices for farmers.
