Hanoi (VNA) – The Vietnamese Government has recently issued a decree, deciding to extend a reduction in value-added tax (VAT) until the end of June 2025.
The VAT cut to 8% from 10%, which has been in place since early 2022, was designed to support individuals and businesses in recovering from the impact of COVID-19 pandemic, with the funding now reaching 123.8 trillion VND (4.86 billion USD).
Under Decree No.72 previously issued by the Government, the VAT reduction on certain groups of goods was set to expire on December 31, 2024.
According to newly-issued Decree No.180, which took effect from January 1, the policy applies to goods and services currently subject to a 10% tax rate. However, the regulation excludes specific 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, chemical products, and goods and services subject to special consumption tax.
According to the Ministry of Finance, the extension would result in a budget deficit of around 25 trillion VND, yet it is is expected to reduce living expenses, helping people save more and, in turn, stimulate demand and boost consumption.
The ministry believes that this measure will support the recovery of production and business, thereby contributing back to the state budget and the economy./.
