Effort exerted to promote domestic consumption motivation

Specialising in manufacturing electronic products according to orders, Lai Hoang Duong, Director of Thanh Giong Communication and Computer Joint Stock Company, said that although the US has announced a 90-day suspension of reciprocal tariffs, the risk is still looming. Therefore, many foreign partners have announced a reduction in production and have requested to temporarily stop receiving orders due to lack of demand.

Important “support”

Worryingly, the number of partners suspending orders is gradually increasing, at an average rate of 3-5%/week. That means for every 100 customers that the business has, every week there are 3-5 more customers announcing the temporary suspension of receiving orders. From now until the end of the 90 days that the US President extended, according to Duong, if there is no adjustment to this tariff rate soon, businesses at the end will have stronger adjustments.

While waiting for new tax policies and to compensate for the shortage from exports, businesses are trying to boost consumption in the domestic market. “According to regulations, from July 1, 2025, all business households must issue electronic invoices. Accordingly, the demand for computer equipment will increase. This is also an opportunity to increase revenue for us.”

At the recently held seminar on solutions to strengthen and develop the domestic market, Bui Nguyen Anh Tuan, Deputy Director of the Department of Domestic Market Management and Development under the Ministry of Industry and Trade, said that with more than 100 million consumers, the domestic market always plays a strategic role as a pillar for the growth and stability of Viet Nam’s economy.

Specifically, in difficult times, such as the COVID-19 pandemic or international trade fluctuations, the domestic market has proven its role as an important support, maintaining production activities and promoting growth when exports face obstacles.

Therefore, in recent times, to stimulate domestic consumption, the Ministry of Industry and Trade has implemented a national communication campaign to strengthen communication activities to encourage people to use Vietnamese products and services. Regarding trade promotion, many large-scale shopping events are being organised, combining online and offline formats, with the participation of retail businesses, e-commerce platforms, and service industries.

In addition, promoting domestic tourism through coordination with the tourism industry to deploy promotional packages, connecting tourism experiences with local products and services, thereby promoting consumption and promoting Vietnamese culture.

Golden time to stimulate demand

In Resolution No.25 on growth targets for industries, fields and localities to ensure the national growth target of 8% or more in 2025, the government has set specific targets for each industry and field, in which the total retail sales of goods and consumer service revenue is about 12%. This is a very challenging number.

Dau Anh Tuan, Deputy General Secretary and Head of the Legal Department of the Viet Nam Chamber of Commerce and Industry, said that the current competitive pressure is very high due to the risk of trade diversion — goods from neighbouring countries, such as China, when unable to be exported to the US, will penetrate other countries, including Viet Nam. Moreover, Viet Nam is participating in many free trade agreements (FTAs) and many tariff barriers have been removed, so the pressure of competition at home is even more fierce.

To improve competitiveness, domestic enterprises need to build brands and develop a solid distribution system. However, this is not easy. Therefore, it is necessary to have support from the state in developing the distribution chain, supporting businesses to penetrate the domestic market, especially in the context that support policies for this sector are not really strong and synchronous.

According to Tran Anh Thang, member of the Board of Directors of Viet Nam Export Import Commercial Joint Stock Bank (Eximbank), the US tax on Chinese goods may cause the price of imported goods from this country to increase. Many imported raw materials and components are used in the production of consumer goods in Viet Nam, causing input costs to increase, affecting domestic retail prices. This leads to concerns about the return of inflation, the price of goods has not increased today but will increase in the next few months, making people cautious about spending.

On the positive side, US tariffs can create opportunities for Vietnamese goods to replace, bringing domestic consumption to the forefront. Therefore, Thang proposed to coordinate with retail and e-commerce businesses to deploy small, flexible loan products that do not require collateral, to meet practical spending needs such as buying household appliances, paying tuition fees, domestic travel, healthcare, etc.

In addition, it is necessary to expand green consumer credit and digital consumption, specifically loan packages for buying electric vehicles, energy-saving equipment, and sustainable consumer products; at the same time, promote consumer lending through partner channels such as the “buy now, pay later” model, fintech companies, and e-commerce platforms, to effectively reach young customers and promote the digitalisation process, etc.

Along with credit, taxes are also important solutions to stimulate consumer demand and promote business development. Therefore, Nguyen Thi Cuc, President of the Viet Nam Tax Consulting Association, proposed to postpone the application of the special consumption tax policy on alcohol and beer, according to the plan to increase from 5% in 2027, and then add 5% next year, to avoid causing tax shock to businesses.

In addition, taxes on individual business households should be reduced, exempted, or kept at a very low level. For business households with large revenue, the same tax rate should be applied as enterprises to encourage the conversion from business households to enterprises, and there should be a policy of tax extension and reduction for small and medium enterprises.

Regarding value added tax (VAT), the proposal to reduce 2% for the last 6 months of the year applies to all groups currently subject to 10% tax, which is the input of all industries and should be reduced evenly.

“The drafting committee can consider reducing VAT for all types of goods and services. From there, businesses will reduce production and business costs, lower product prices, thereby stimulating consumption and promoting economic development,” Cuc emphasised.