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Saturday, June 22, 2024

Government approves VAT cut proposal

The Saigon Times

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HCMC – The Government has approved a Ministry of Finance proposal for lowering the value added tax (VAT) from 10% to 8% to support businesses and households to cope with economic headwinds.

Deputy Prime Minister Le Minh Khai has signed a Government resolution endorsing a request for drafting a National Assembly resolution on the VAT reduction.

The VAT cut is expected to help fuel local consumption and production which have been impacted by the global economic downturn.

The Ministry of Finance said State budget revenue from January to March this year inched down and that tax revenue from import and export activities also declined over 16% year-on-year.

The ministry proposed all goods and services currently subject to the 10% VAT benefit from the forthcoming tax cut.

In its resolution issued on May 2, the Government told the Ministry of Finance to seek feedback from other ministries and agencies and complete drafting a National Assembly resolution on the tax cut in a fast-track manner.

The Minister of Justice was tasked with reporting to the National Assembly Standing Committee to seek approval for adding the VAT reduction plan to the 2023 law-making program.

The Ministry of Finance estimated that the VAT reduction, if approved, would lead State budget revenue to fall by VND5.8 trillion per month, or about VND35 trillion in the entire second half of this year.

It also proposed reducing about 35 fees and charges from July 1 to December 31 to support businesses and households, equivalent to a reduction of VND700 billion in State budget revenue.

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