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Friday, June 14, 2024

VAT cut proposed to prop up economy

By T.Dao

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HCMC – The Tax Policy Department under the Ministry of Finance has proposed revising down the value-added tax (VAT) from 10% to 8% for certain goods and services to boost consumption and economic growth.

The department proposed two options for the VAT reduction in a draft resolution for the regular Government meeting in March.

For the first option, the VAT would be lowered by two percentage points for those goods and services that are currently subject to a 10% VAT. The VAT rate for this group of goods and services would be 8% after the reduction.

Regarding the second option, the VAT will be cut to 8% from the current 10%, except for goods and services that already benefited from the previous VAT reduction as part of the Government’s policy to prop up the post-pandemic economic recovery program under the National Assembly’s Resolution 43.

The tax reduction is proposed to be implemented from July 1 to December 31 this year.

Previously, the 2022 VAT reduction by two percentage points was aimed at encouraging businesses and individuals to step up production and consumption.

According to the Ministry of Finance, the total amount of tax reductions and exemptions under the Government’s policy to prop up the post-pandemic economic recovery program last year totaled an estimated VND50.2 trillion. Of which, the VAT cut from 10% to 8% was around VND38.9 trillion.

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