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

Hanoi – 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.

The Ministry of Finance and Ministry of Justice were asked to complete the proposed draft resolution.

Last month, the Government agreed with the Ministry of Finance’s proposal on a plan to reduce taxes, fees, and charges for 2023, which suggested the reduction.

In its proposal submitted to the PM on April 14, the ministry suggested a VAT reduction from 10 per cent to 8 per cent for several goods and services, along with a 20 per cent cut in the percentage of goods for VAT calculation for business establishments (including business households and individuals) when issuing invoices for all goods and services subject to the VAT.

The ministry suggested that the policy, which is expected to boost the economy, should be applied until December 31.

According to the Ministry of Finance, if VAT is reduced by 2 per cent for all goods and services within six months, the total tax reduction will be about 35 trillion VND (1.5 billion USD) in support of people and businesses to overcome difficult times.

The 2 per cent reduction in VAT is hoped to affect aggregate demand significantly, effectively doping the economy amidst the current slowdown.