2% reduction in value added tax (VAT) for another 6 months

VAT is reduced to 8% until the end of this year. Photo: Hai Nguyen

With nearly 95% of delegates in favor, the National Assembly voted to pass the Resolution of the 7th session. In the resolution just passed, the National Assembly decided to extend the 2% VAT reduction period (from 10% to 8%) for another 6 months, until the end of 2024.

Similar to previous times, the 2% VAT reduction applies to a number of groups of goods and services. The sectors that will continue to not receive this tax reduction include real estate, securities, banking services, telecommunications, information technology, coke, chemical products, goods and services subject to special consumption tax.

Regarding this policy, the Government said that a 2% reduction in VAT in the last 6 months of 2024 will cause the budget revenue to decrease by about 24,000 billion VND, and by nearly 47,500 billion VND for the whole year.

In return, the policy will promote production and business activities, contributing to creating more revenue for the budget. Enterprises reduce production costs, lower product prices, increase competitiveness; people reduce consumption costs...

The National Assembly assigned the Government to be responsible for implementing this tax reduction, ensuring revenue sources so as not to affect the budget estimate and budget deficit this year. The Government also needs to ensure sources for estimated expenditures and urgent needs that arise.

Reporting on the reception and revision of the draft Resolution, Secretary General of the National Assembly Bui Van Cuong said that some opinions said that determining goods and services eligible for tax reduction is still difficult and problematic in implementation, not really creating favorable conditions for businesses.

Therefore, it is proposed to reduce the VAT rate by 2% for all groups of subjects currently applying the 10% tax rate according to the provisions of the VAT law.

At the same time, it is proposed to consider extending the policy application period until the end of 2025 or until the VAT Law (amended) takes effect.

Regarding this issue, the Standing Committee of the National Assembly believes that the scope of groups of goods and services eligible for VAT reduction has been determined when Resolution No. 43 of 2022 was issued and applied uniformly in Resolution No. 101 of 2023 and Resolution No. 110 of 2023 of the National Assembly. The Government has issued decrees and documents guiding implementation in the past time.

Regarding the difficulties in implementing policies related to determining subjects eligible for tax reduction, according to the Government's report, these issues have basically been resolved through the Ministry of Finance proactively coordinating with relevant ministries and branches to handle and promptly issue documents guiding implementation.

Regarding implementation time, the Government proposed the policy application period from July 1 to December 31 and there is currently no basis to extend the application period of this policy.

Therefore, the Standing Committee of the National Assembly proposed that the National Assembly request permission to keep the scope of tax reduction subjects as prescribed in Resolution No. 43/2022 of the National Assembly and the policy application period from July 1 to December 31, 2024.

According to experts, thanks to the 2% reduction in VAT, people will save on spending and living expenses, bringing about a psychological impact, helping to stimulate demand and increase consumption.

Source: https://laodong.vn/kinh-doanh/giam-2-thue-gia-tri-gia-tang-vat-them-6-thang-1359425.ldo