Tax down triggers fall in prices

The decisions to allow deferment of tax payment and reduce value added tax (VAT) on 18 categories of commodities has prompted prices of many goods and services to fall soon after they took effect on February 1.
Many enterprises nationwide have announced prices cuts of 2-6 per cent over the last two days.Eighteen categories of commodities now enjoy a 50 per cent VAT reduction, including wholly-assembled cars and car components, engines, gear boxes, coal, basic chemicals and hotel and tourism services.Hoang Quoc Tuan, deputy director of the Dong Nai Brick and Tile Co, said that thanks to the tax reduction, tile companies would not have to spend time and money on measures to boost sales in a difficult period.
Customers would also benefit as they will not have to spend as much money to buy products, he said. The reduction of VAT from 10 to five per cent has seen the prices of four-hole bricks go down from VND1,100 to VND1,045 each. The price of ceramic tiles has decreased from VND6,800 to VND6,460 each.