HCMC — The Government has proposed extending a two-percentage-point value-added tax (VAT) cut through the end of 2026 to support businesses and stimulate economic growth.
Finance Minister Nguyen Van Thang presented a proposed resolution in this regard to the National Assembly on Tuesday, May 13. The proposal would keep the VAT rate at 8% for most goods and services, down from the standard 10%, until December 31, 2026.
The measure excludes sectors such as telecommunications, finance, banking, insurance, real estate, mining (excluding coal), and goods subject to special consumption tax, including fuel.
The Government said the 8% VAT extension would help achieve an economic growth rate of at least 8% in 2025 and create a foundation for potential double-digit growth from 2026 to 2030.
The Ministry of Finance estimated the VAT reduction would reduce state revenue by VND121.7 trillion over the second half of 2025 and in 2026.
Vietnam previously implemented a similar VAT cut from 2022 through early 2025. The National Assembly’s Economic and Financial Committee said the policy is necessary but warned it may reduce fiscal scope and affect long-term tax stability. Lawmakers called for a comprehensive impact assessment and alignment with medium-term fiscal targets and public debt safety.
