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Saturday, July 20, 2024

NA approves VAT reduction

By T.Dao

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HCMC – The National Assembly (NA) has agreed to reduce the value-added tax (VAT) from 10% to 8% from July 1 until the end of this year, except for the telecommunications, real estate, securities, insurance, and banking sectors.

This is part of a resolution of the NA’s fifth session that received support from 481 of the 482 deputies casting votes on June 24 afternoon.

The VAT cut will not apply to the following categories of goods: telecommunications, information technology, finance, banking, securities, insurance, real estate business, metals, precast metal products, mining products, refined petroleum products, chemical products, and goods subject to a special consumption tax.

The VAT reduction will lead to a decrease of around VND24 trillion in State budget revenue. The Government will report on the results of the VAT cut during the NA’s sixth sitting, which will take place at the end of this year.

Earlier, some NA deputies proposed applying the VAT reduction to all groups of goods and services currently subject to the tax rate of 10%, while others wanted to raise the reduction level to 3%, 4% or 5% and extend the duration of the policy until mid-2024 or the end of that year.

However, the NA Standing Committee rejected those suggestions, saying a blanket tax reduction for all goods and services would heavily impact State budget revenue. The Government has yet to fully assess this policy’s effects, especially amid the budget revenue decline during the first months of 2023.

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