HCMC – The National Assembly (NA) Standing Committee has endorsed a Government proposal to extend a value-added tax (VAT) reduction of two percentage points on fuels, goods, and services through the end of 2026.
The committee reviewed the draft resolution on April 23 during its 44th session. The proposal calls for the VAT rate on most goods and services to remain at 8%, compared to the standard 10%.
The tax reduction would apply to fuels, data processing services, washing machines, microwave ovens, precast metal products, and imported or wholesale coal. Telecommunications, banking, securities, insurance, real estate, and products subject to special consumption tax would continue to be excluded.
Cao Anh Tuan, deputy minister of Finance, said the tax cut would reduce state revenue by around VND121.7 trillion, with an estimated VND39.5 trillion impact in the second half of 2025 and VND82.2 trillion in 2026.
The Government said the VAT reduction would lower costs for goods and services, stimulate production and business activity, and support economic growth from July 2025 until the end of 2026.
Phan Van Mai, chairman of the NA’s Economic and Financial Committee, said the committee agreed with the tax cut and supported expanding its scope as proposed by the Government. Some members requested a review of goods affected by global trade tensions and reciprocal tariffs from the U.S., with consideration of further tax reductions if fiscal conditions allow.
Deputy Prime Minister Ho Duc Phoc said the continued tax support is necessary as Vietnam’s economy has come under pressure from the new U.S. trade policy. He noted that the VAT rate has been reduced from 10% to 8% over the past four years to support post-pandemic recovery.
A comprehensive report on fiscal projections and public debt for 2026 and beyond is expected to be submitted in July.
NA Vice Chairman Nguyen Duc Hai said the committee backed the proposal and called for finalization of the documents for consideration at the NA’s upcoming ninth session.
