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Sunday, July 21, 2024

Government greenlights VAT reduction to prop up economy

By Thai Huy

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HCMC – The Government has approved the Ministry of Finance’s proposal to revise down the value-added tax (VAT) from 10% to 8% for certain goods and services this year to boost consumption and economic growth.

Deputy Prime Minister Le Minh Khai assigned the Ministry of Finance and the Ministry of Justice to jointly prepare and submit the necessary documents to the Government by April 25 for further consideration.

The Government will seek approval from the National Assembly to issue a resolution on the VAT cut.

Previously, the Ministry of Finance proposed lowering the VAT by two percentage points for goods and services currently subject to a 10% VAT from July 1 to December 31 this year.

This policy would lead to State budget revenue falling by VND5.8 trillion per month and VND35 trillion in the next six months of the year.

The ministry also proposed lowering 35 fees and charges in the next six months of the year to support businesses and individuals, equivalent to a decrease of VND700 billion in State budget revenue.

The VAT reduction by two percentage points was also applied in 2022 to encourage businesses and individuals to step up production and consumption following the Covid-19 pandemic.

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