MoF proposes 2 per cent VAT reduction until mid-2024

October 17, 2023 | 11:45

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The Ministry of Finance (MoF) has recommended reducing VAT by 2 per cent for the first six months of 2024 on some groups of goods and services that are currently subject to the 10 per cent rate.

MoF proposes 2 per cent VAT reduction until mid-2024

The MoF is collecting feedback from ministries, the Vietnam Chamber of Commerce and Industry, and municipal and provincial people's committees on the 2 per cent VAT reduction policy that could be applied in 2024.

The MoF said that it will study and propose a number of solutions to reduce taxes, fees, and charges next year. The potential 2 per cent VAT reduction is expected to support businesses and the community.

Specifically, goods and services that are currently subject to 10 per cent VAT would be entitled to a reduced rate of 8 per cent, with the following exceptions; telecommunications, IT services, finance and banking services, securities, insurance, real estate business, metal production and the manufacture of prefabricated metal products, the mining industry (excluding coal mining), the production of coke (a coal-based fuel), refined petroleum, the production of chemicals and chemical products, and goods and services that are subject to special sales taxes.

If approved, the VAT rate reduction will take effect from January 1, 2024 to June 30, 2024, with the government predicted to see a budget revenue reduction of VND25 trillion (just over $1 billion) during the period.

Between July and September this year, the 2 per cent VAT reduction policy has supported businesses and consumers with a total sum of about VND11.7 trillion ($493.7 million). While reducing the prices of many goods and services, the policy also facilitates production and creates more jobs, stimulating consumer demand.

In 2022, the support package for VAT reduction amounted to VND44 trillion ($1.86 billion), providing necessary relief during difficult times.

Government proposes National Assembly consider 2 per cent reduction in VAT in coming agenda

The Government has proposed the National Assembly (NA) to consider a 2 per cent reduction in the value-added tax (VAT) on goods and services subject to a 10 per cent VAT during its coming meeting stated to start on May 22.

Businesses and households hold onto VAT cutback hopes

A proposal on the reduction of VAT was submitted to the National Assembly on May 5 by Minister of Finance Ho Duc Phoc, amid plenty of challenges and risks for the economy.

Support to continue in form of VAT cut

Many types of goods and services currently subject to a 10 per cent VAT rate are to continue being eligible for a 2 per cent reduction in this type of tax, which is scheduled to get the official thumbs-up from the legislature in late June.

By Thanh Van

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