The Ministry of Finance is proposing the development of a draft Resolution for the National Assembly regarding a 2% reduction in the Value-Added Tax (VAT) rate for the first six months of 2025.
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Photo 1: Proposal To Present To The National Assembly For A 2% Vat Reduction In The First Half Of 2025_Hotline: 097 211 8764
In the 2022-2024 period, the National Assembly decided to reduce the VAT rate by 2% for goods and services subject to a VAT rate of 10% (reducing it to 8%), with certain exceptions for specific goods and services. This VAT reduction, along with other tax, fee, and charge support measures, has greatly benefited businesses by reducing production costs, increasing profits, and enhancing consumer demand.
As of the first 10 months of 2024, the total retail sales of goods and consumer service revenue were estimated at VND 5,246.2 trillion, an increase of 8.5% compared to the same period last year. The Consumer Price Index (CPI) rose by 3.78% year-on-year, and core inflation increased by 2.69%. Total merchandise import-export turnover reached $647.87 billion, up by 15.8% from the previous year, with exports rising by 14.9% and imports increasing by 16.8%. The trade balance recorded a surplus of $23.31 billion. National budget revenue amounted to VND 1,654.2 trillion, reaching 97.2% of the year’s target and increasing by 17.3% compared to the previous year.
From these results, it can be concluded that the 2% VAT reduction policy has contributed to reducing costs through businesses benefiting from VAT reductions on the production and sale of goods and services, which in turn led to lower prices for consumers. This has stimulated business activities, consumer spending, created more jobs, and helped achieve the goal of stimulating demand and fostering economic growth.
Based on these achievements, the Ministry of Finance proposes a 2% reduction in the VAT rate for goods and services that are currently subject to a 10% rate (reduced to 8%), with the following exceptions: telecommunications, information technology, finance, banking, securities, insurance, real estate, metals, finished metal products, mining products (excluding coal extraction), coke, refined petroleum, chemicals, and goods and services subject to excise tax.
The proposed reduction will apply from January 1, 2025, to June 30, 2025.
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