The Vietnamese government recently issued a decree deciding to extend the reduction of value added tax (VAT) until the end of June 2025.
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The VAT reduction from 10% to 8%, in force since the start of 2022, was designed to help individuals and businesses recover from the impact of the COVID-19 pandemic, with funding now reaching 123.8 trillion VND (4.86 billion USD).
| The VAT reduction on certain groups of goods was due to expire on December 31, 2024. |
| Photo : VNA/CVN |
Under Decree No. 72 previously issued by the government, the VAT reduction on certain groups of goods was to expire on December 31, 2024.
According to the new decree No. 180, which entered into force on 1is January, the policy applies to goods and services currently subject to a 10% tax rate. However, the regulations exclude certain categories of goods and services, including telecommunications, information technology, financial services, banking, securities, insurance, real estate businesses, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemicals and goods and services subject to a special consumption tax.
According to the Ministry of Finance, the extension would result in a budget deficit of around VND25 trillion, but it is expected to reduce living expenses, help people save more and, therefore, boost demand and consumption.
The ministry believes that this measure will support the recovery of production and business, thereby contributing to the state budget and the economy.
VNA/CVN
