VAT reduction of 2% for some goods and services expected to continue

June 05, 2024 - 15:21
The Ministry of Justice has been looking keeping the reduction in VAT until the end of year, following a draft resolution of the National Assembly on VAT reduction, chaired by Deputy Minister Trần Tiến Dũng.
Appraisal session on the National Assembly’s draft Resolution on VAT reduction. — Photo of

HÀ NỘI — The Ministry of Justice held a meeting to appraise the draft resolution of the National Assembly on VAT reduction, chaired by Deputy Minister Trần Tiến Dũng.

During the meeting, representatives from the Ministry of Finance highlighted that between 2020-30, the National Assembly had decided on a 2 per cent reduction in VAT for goods and services subject to a 10 per cent rate (down to 8 per cent), excluding sectors like telecommunications, IT, finance, banking, insurance, real estate, metals, refined petroleum, and others subject to special consumption tax.

The VAT reduction was a positive move, aiding in post-COVID-19 economic stabilisation and promoting macroeconomic stability and growth.

However, future global and regional complexities, slow recovery of major trade partners and potential supply chain disruptions still pose risks and domestically, despite signs of recovery in Q1 2024, challenges remain.

Therefore, extending the 2 per cent VAT reduction for certain goods and services from July 1, 2024 to the end of the year, is deemed necessary to boost consumption, support business recovery and contribute to the national budget and economy, aligning with the 2021-25 socio-economic development plan.

On Tuesday, the appraisal council members largely agreed with the proposed VAT reduction. Some suggested extending the reduction to all goods and services due to classification difficulties.

Deputy Minister Trần Tiến Dũng acknowledged and appreciated the preparation of the draft resolution. He urged the drafting agency to fully incorporate and address the feedback from the appraisal council and thoroughly assess the socio-economic impacts of the draft resolution. — VNS