HCMC – The Vietnam Chamber of Commerce and Industry (VCCI) has recommended a two-percentage-point reduction in value-added tax (VAT) for all goods and services, aiming to boost consumer demand and simplify tax compliance for businesses.
The Ministry of Finance’s draft resolution proposes lowering VAT from 10% to 8% for most goods during the first six months of 2025, excluding sectors such as telecommunications, finance, and real estate.
While the VCCI acknowledged the VAT cut as an effective policy, it highlighted the need for simpler procedures. The chamber noted that the current methods for classifying goods for tax purposes are overly complex due to the lack of clarity.
Businesses often struggle to apply Vietnam’s industry codes to determine applicable VAT rates. This ambiguity has increased risks and operational difficulties, said the VCCI.
Companies frequently receive unclear guidance from state agencies, leaving them to interpret and apply tax rules differently, which adds costs and administrative burdens.
To address these challenges, VCCI urged policymakers to extend the two-percentage-point tax cut to all goods and services, maximizing the policy’s impact while minimizing complications.
In 2023, a similar VAT reduction during the second half of the year saved businesses and consumers approximately VND23.4 trillion. The Ministry of Finance estimates that the 2024 VAT cut could result in savings of up to VND49 trillion.
