Under current regulations, cultural activities, exhibitions, sports, art performance, film production, import and screening enjoy a VAT of 5 percent.

It is expected that the draft VAT Law (amended) may be discussed and approved at the National Assembly’s ongoing 8th session, under which cultural products and services are excluded from the list of products and services subject to the preferential VAT rate of 5 percent. 

This means that if the draft law is approved, cultural products and services will be taxed 10 percent in accordance with Article 9 of the draft law.

The information has caught attention from the public, National Assembly deputies and cultural experts.

According to Bui Hoai Son, a permanent member of the National Assembly’s Committee for Culture and Education, tax policies in general and VAT in particular play a very important role in cultural development.

The state can use collections from cultural products and services to preserve heritage sites, build cultural infrastructure and organize artistic events. Not only an economic tool, tax also serves as the key that opens the door to the arts and culture for all classes in society.

Reasonable tax policies help reduce production costs of culture products, and help to bring culture and arts closer to the people. When culture is accessible, it will permeate through the life, thereby creating a society rich in identity and creativity.

Taxes also serve as a driving force that encourages creativity and preservation. In many countries, thanks to reasonable and flexible taxation policies, culture and arts develop well, even without a ministry of culture.

He believes that it would be better not to raise taxes on these activities. He went on to say that it is necessary to consider reducing VAT on cultural products and services, because this allows people to more easily access cultural products, and encourages creativity and preserves traditional values.

“By supporting culture with reasonable taxation, we are investing in the spiritual platform of the society, building a strong and diverse cultural community with sustainable development,” he said.

Higher tax, higher pressure

“Raising tax at this moment would put cultural units into a tense situation,” said Meritorious Artist Nguyen Si Tien, Director of Tuoi Tre (the Youth) Theater.

At present, art performing activities are still unstable with limited audiences, especially for the traditional arts. 

The leader of the Youth Theater said the theater's revenue is not very high and many artists are having problems, so if the tax is raised, art units will bear pressure.

Every year, the Youth Theater is lit up for about 40 weeks. Ticket prices range from VND200,000-250,000. The revenue from each performance is tens of millions of dong, just enough to maintain operations, make payment for electricity and water bills, and pay for practice and training. 

It is very costly to develop a play and artistic program, especially ones that the theatre needs to buy a copyright from foreign holders. And Vietnamese people don’t have the habit of enjoying artistic products regularly. 

Tien said he had talked with some people who said they had not spent money to buy tickets to the theatre for several years.

According to Tien, raising VAT rate could be considered, but not at this time.

“We may think of it in the future, when artistic activities become more stable and the culture industry develops. It is the time when people’s living standards improve and people have the habits of going to theatres,” Tien said.

Long-term investment

The Party and the State have repeatedly emphasized the need to develop the culture industry recently. According to Son, it is necessary to consider investment in culture as investment for development, rather than for profit and create favorable conditions to develop culture, especially tax policies.

At a workshop discussing a solution to mobilize social resources for culture held in August, Nguyen Thi Hau, former Deputy Director of the HCM City Institute for Development Studies, noted that when making investment in culture and arts, one should not expect to earn money immediately. Success will come step by step.

Tinh Le