Trade promotion plays a crucial role in stimulating business activities, enhancing competitiveness, and driving economic growth. In the context of rapid digital transformation, trade promotion has become an effective tool for businesses to reach potential customers, increase revenue, and build their brand presence. On October 10, 2024, the Government issued Decree 128/2024/ND-CP (“Decree 128”), which introduces several amendments and supplements to Decree 81/2018/ND-CP (“Decree 81”) on trade promotion. These changes aim to address existing shortcomings after six years of implementation.
1. Expansion of Exemptions from Maximum Promotional Value Limits
Previously, under Decree 81, certain goods and services were exempt from the maximum promotional value limits specified in Articles 6.1 and 6.2. However, the implementation of these limits faced challenges in practice. For instance, when businesses conducted multiple promotional activities within a single campaign, there were inconsistencies in determining the promotional value limit due to a lack of clear legal guidance. This often led to discrepancies between businesses’ calculations and the estimates of regulatory authorities.
Decree 128 introduces a more flexible approach by expanding the scope of exemptions from the maximum promotional value limit. In addition to the cases outlined in Decree 81, other promotional activities may also qualify for exemption, provided they receive approval from the relevant state regulatory agency for trade.
2. Removal of Time Restrictions on Centralized Promotional Programs
According to Article 6.5(a) of Decree 81, centralized promotional programs organized by state authorities were subject to time restrictions, such as being limited to specific hours, days, weeks, months, or promotional seasons.
In practice, many localities have established stores and centers specializing in discounted products, including surplus stock, outdated items, and specially manufactured goods intended for sale at reduced prices. These initiatives aim to promote tourism, economic, and social activities. However, the time restrictions imposed by Decree 81 limited the effectiveness of these programs.
To address this issue, Decree 128 completely removes the time constraints on centralized promotional programs. This change allows businesses greater flexibility in designing promotional campaigns that align with market demand, thereby stimulating consumer spending and fostering economic growth.
3. Simplification of Administrative Procedures for Promotional Activity Notification
In recent years, the number of administrative filings for promotional activity notifications received by the Departments of Industry and Trade has increased significantly, particularly in Ho Chi Minh City and Hanoi. Decree 81 required businesses to submit notifications before implementing various promotional activities, creating administrative burdens.
Decree 128 introduces a major improvement by eliminating the notification requirement for four common types of promotions:
(i) Providing free product samples or service trials;
(ii) Giving away free goods or services;
(iii) Offering discounts;
(iv) Selling goods or services with accompanying vouchers.
This regulatory change significantly reduces administrative burdens for businesses, facilitating smoother promotional activities and overall business operations.
While Decree 128 does not introduce fundamental changes compared to Decree 81, it includes key adjustments to streamline procedures and clarify previously ambiguous points. The reduction of administrative formalities will allow businesses to conduct promotional activities more efficiently. As Decree 128 takes effect on December 1, 2024, businesses should promptly update their compliance measures to ensure adherence to the new regulations.