Vietnam unveils new strategies to boost domestic market, aid businesses

The Vietnamese Government is pursuing strategies to support domestic businesses amid export challenges by expanding the "Vietnamese People Prioritize Vietnamese Goods" campaign, offering financial support, and cutting taxes.

These were released at a conference on the development of the domestic market in Ho Chi Minh City on April 22.

The conference delegates called for further reductions of environmental protection taxes in oil and import tariffs to stabilize prices, as well as support for businesses by extending tax payment deadlines and reducing land lease payments, calling these steps urgent.

They also urged larger personal income tax deductions to increase disposable income and stimulate consumer spending.

Amid the continuing impact of global economic volatility on Vietnam, several industry associations and ministries attending the conference agreed that strengthening the domestic market is a key strategy for ensuring economic stability and growth.

Tran Huu Linh, Director General of the Department of Domestic Market Management and Development under the Ministry of Industry and Trade, emphasized that the domestic market serves as a "lifeline" for local businesses facing challenges in export markets, especially those with protectionist policies.

The Ministry of Industry and Trade is collecting proposals for a consumer demand stimulation plan to be submitted by April 30, 2025, according to Prime Minister Pham Minh Chính's directive under Official Dispatch No. 47, which focuses on measures to drive economic growth in 2025. The directive came as the export sector faces growing pressure from changing tariff policies.

According to the Ministry of Finance, while macroeconomic indicators are improving, consumer sentiment remains cautious. CPI rose by 3.2% in Q1, remaining below the 4% target, but inflationary pressures persist. Meanwhile, real income growth has yet to sufficiently boost consumer spending.

Phan Van Chinh, Deputy Director General of the Domestic Market Management and Department, noted that cuts in value-added tax (VAT), interest rate support for retail businesses, and public investment initiatives have helped boost domestic consumption.

"However, long-term growth will require a coordinated approach focusing on public investment, regulatory reforms, and domestic market development, in particular through administrative reforms in areas such as taxation with a view to creating a transparent and efficient business environment," he said.

Chinh also highlighted efforts to work more closely with local authorities and businesses to implement programs that link supply and demand. These efforts include the expansion of the "Vietnamese People Prioritize Vietnamese Goods" initiative and the One Commune One Product (OCOP) program, which aims to link production with distribution and support domestic product sales.

Nguyen Le Thien Thanh, Deputy Head of the Trade Management Division at the Ho Chi Minh City Department of Industry and Trade, called for further expansion of market stabilization programs combined with initiatives to link supply and demand during peak consumption periods to both control inflation and stimulate consumption.

Nguyen Anh Duc, Chairman of the Vietnam Association of Retailers, recommended the use of information technology in business operations and product distribution, and stressed the need to support and encourage businesses to engage in e-commerce and online sales.

Doan Thi Huong Thanh, Legal Director at WinCommerce, the retail arm of Masan Group, suggested that the government help them access commercial planning and modern logistics infrastructure, which would allow them to reduce costs and increase competitiveness.

She also called for maintaining the 2% VAT reduction, expanding tax and credit incentives, and creating favorable conditions for domestic enterprises to access affordable financing, reducing interest rates, and offering exemptions and reductions in fees. She also advocated the development of environmentally friendly raw materials at reasonable prices.

The Ministry of Agriculture and Environment has been asked to find new markets for agricultural products to replace those in which Vietnamese exporters are currently experiencing difficulties. This would include promoting trade and linking large agricultural production areas to support the sale of domestically produced goods.