Lawmakers agree to extend VAT reduction policy for another six months

The policy is applicable to almost all groups of products and services, except for telecommunications, information technology, financial activities, banking, securities, insurance, real estate transactions, metal production and production of prefabricated metal products, coal mining, refined petroleum, production of chemicals and chemical products, along with goods and services subject to special consumption tax.

The National Assembly requested that the Government timely and effectively implement the resolution, without affecting the estimated state budget revenue and deficit in 2024, and report the results to the National Assembly at its coming session.

In June 2023, the National Assembly passed a resolution, agreeing with the government’s proposal to reduce VAT by 2% from July 1, 2023 to December 31, 2023.

The Government, in its report to the National Assembly, says the VAT reduction is needed to spur the national economy which has been impacted by the prolonged COVID-19 pandemic, along with the profound impact of climate change and natural disasters.

Slashing the VAT rate will help reduce costs and selling prices of goods and services, contributing to promoting production and business, maintaining jobs for workers, and stabilising the macroeconomy and economic recovery in 2024, according to Finance Minister Ho Duc Phoc.

With the new resolution coming into force, the State budget revenue will be reduced by approximately VND25 trillion during the course of six months.