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Friday, June 14, 2024

NA approves VAT cut extension to mid-2024

The Saigon Times

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HCMC – The National Assembly (NA) has approved the extension of the two-percentage-point reduction of the value-added tax (VAT) for specific items until June 30, 2024.

On the final day of its sixth sitting today, the NA adopted a resolution on the VAT cut extension thanks to unanimous support from legislators. An 8% VAT will be applied to goods and services currently subject to a 10% VAT rate.

On the exclusion list are telecommunications, information technology, finance, banking, securities, insurance, real estate business, metals, precast metal products, mining products, refined petroleum products, chemicals, and goods subject to a special consumption tax.

To ensure that the VAT reduction does not adversely affect the nation’s budget revenue for 2024, the Government is tasked with taking coping measures. They are also required to provide a review report at the next sitting of the National Assembly.

It is estimated that the extension of the VAT reduction will lead to State budget revenue falling by VND25 trillion in the first half of 2024.

Nevertheless, this reduction, combined with other tax, fee, and levy measures, will create favorable conditions for businesses to reduce costs, increase profits, and stimulate consumer demand.

In June of this year, the NA approved a VAT reduction of two percentage points on specific goods from July 7 to December 31, 2023 given tough economic conditions.

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