Brian Jeffrey
Currently, cultural fields such as exhibitions, artistic performances, and film production are subject to a VAT of 5 percent.
However, a proposed amendment to the VAT Law could be reviewed and potentially passed during the National Assembly’s 8th session, which might remove cultural products and services from the 5 percent VAT category.
Should the new law be accepted, these cultural offerings would face a VAT rate of 10 percent as stipulated in Article 9 of the proposal.
This news has sparked significant concern among the public, lawmakers, and cultural specialists.
Bui Hoai Son, a senior member of the National Assembly’s Culture and Education Committee, emphasized the critical role of tax policy, particularly VAT, in fostering cultural growth.
He pointed out that tax revenues from cultural sectors can be utilized for heritage preservation, cultural infrastructure development, and the organization of artistic events. Beyond being a financial instrument, taxes can also serve as a vital enabler of arts and culture across various societal groups.
Effective tax policies can lower production costs for cultural goods, making them more accessible to the public. When culture is easily reachable, it integrates into daily life, enriching community identity and fostering creativity.
Proper tax frameworks also stimulate innovation and cultural heritage conservation. In several countries, flexible tax approaches have successfully nurtured cultural and artistic development, often without a dedicated cultural ministry.
Son advocates against increasing taxes on these activities, suggesting instead a reduction in VAT for cultural products to boost accessibility, encourage creativity, and safeguard traditional values.
“Supporting culture through sensible tax policies is a long-term investment in our society’s cultural integrity, aiming to nurture a robust and diverse cultural community,” he stated.
Meritorious Artist Nguyen Si Tien, head of the Youth Theater, also expressed concerns, stating that raising taxes at this time could burden cultural organizations.
He noted that the performing arts sector is currently fragile, facing dwindling audiences, particularly for traditional performances.
The Youth Theater’s earnings are modest, with ticket prices between VND 200,000 and 250,000. Revenue from performances typically covers basic operational costs, such as utilities and rehearsals.
Producing plays and cultural programs incurs high expenses, especially when acquiring copyrights from international entities, and many locals lack the habit of regularly attending performances.
He mentioned having encountered individuals who have not purchased a theater ticket in years.
Tien believes considering a VAT increase might be feasible in the future, once the cultural landscape stabilizes and the industry grows, alongside improved public living standards and theater-going habits.
The government has consistently highlighted the importance of cultivating the culture sector. Son underscored the necessity of framing cultural investments as developmental rather than merely profit-driven, advocating for conducive conditions and favorable tax policies.
At an August workshop focused on enhancing funding for culture, Nguyen Thi Hau, a former Deputy Director at the HCM City Institute for Development Studies, remarked that investors should not expect immediate returns when investing in culture and the arts; success is typically gradual.
