Continue to reduce value added tax until mid-2025

This week, the Ministry of Finance will report to the Government and submit to the National Assembly a draft Resolution on value-added tax (VAT) reduction, applicable from January 1 to June 30, 2025.

The Ministry of Finance has just officially sent a document to ministries, branches, government agencies and localities nationwide requesting research and comments on the dossier for proposing the development of a National Assembly Resolution project on VAT reduction in 2025.

The opinions and contributions from ministries, branches and localities will be compiled by the Ministry of Finance before November 18, in order to promptly report to the Government for submission to the National Assembly for promulgation, in order to create conditions for taxpayers to soon enjoy the VAT reduction policy.

According to the Ministry of Finance's Submission on the above-mentioned National Assembly Resolution project, the proposal to continue the VAT reduction policy in 2025 aims to concretize the Government's instructions in Resolution 218/NQ-CP (dated November 12, 2024).

In particular, the Government assigned the Ministry of Finance to preside over and coordinate with agencies and localities to propose to competent authorities to issue policies on tax, fee, and land rent exemption, reduction, and extension in 2025, especially continuing to extend the implementation of VAT reduction in the first 6 months of 2025.

The Ministry of Finance has completed the first draft of the National Assembly's Resolution on continuing to reduce VAT.

Accordingly, the scope of application of this Resolution is to reduce the VAT rate by 2%, applicable to groups of goods and services currently subject to a tax rate of 10%, except for some groups of goods and services, including: Telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, production of metals and products from prefabricated metals, production of coke, refined petroleum, production of chemicals and chemical products, mining (except coal mining) and goods and services currently subject to special consumption tax. The period of application of the 2% VAT reduction is applied from January 1, 2025 to June 30, 2025.

Continuing the VAT reduction policy will create conditions for goods and services to reduce prices, helping people increase their opportunities to buy goods at lower costs.

Along with the draft document of the National Assembly's Resolution on VAT reduction in 2025, the Ministry of Finance also issued a Summary Report, assessing the implementation of VAT reduction according to Resolution 142/2024/QH15.

Accordingly, the Ministry said that in 2022, the reduction of VAT (according to Resolution 43/2022/QH15) supported businesses and people with a total of about VND 51,400 billion. In 2023, the reduction of VAT (according to Resolution 101/2023/QH15, applied in the first 6 months of the year) supported businesses and people with a total of about VND 23,400 billion. In 2024, the amount of VAT reduced according to Resolution 110/2023/QH15 and Resolution 142/2024/QH15 is estimated at about VND 49,000 billion.

According to the Ministry of Finance's assessment, continuing the VAT reduction policy in the first 6 months of 2025 will reduce budget revenue by about VND 25,000 billion. Of which, domestic revenue will decrease by about VND 2,500 billion/month and import tax revenue will decrease by about VND 1,500 billion/month.

However, the reduction of VAT in the first two quarters of 2025 will contribute to reducing the cost of goods and services. Thereby promoting production and business and creating more jobs for workers. Particularly for the people, the direct reduction of 2% of VAT rate will create conditions for goods and services to reduce their selling prices. From there, people will have more opportunities to buy goods at cheaper prices, increase cost savings and support the recovery of production and business models as well as improve consumer financial health.

Source: https://thoibaonganhang.vn/tiep-tuc-giam-thue-gia-tri-gia-tang-den-giua-nam-2025-157840.html