Gasoline and oil may have 2% VAT reduction until the end of 2026

On the morning of April 23, the National Assembly Standing Committee held its 44th session to give opinions on the draft Resolution on VAT reduction.

In this presentation, the Government proposed to expand the group of goods, business production, tourism , and consumer services currently subject to 10% tax to be applied at 8% until the end of 2026, instead of mid-year as previously planned. Specifically, gasoline, information technology services, chemical products - prefabricated metals, coke, coal (imported, wholesale in the commercial business stage) will have a 2% VAT reduction.

Similar to previous times, telecommunications services, banking, securities, insurance, real estate and items subject to special consumption tax... continue to not receive this tax reduction.

In fact, the policy of reducing VAT to 8% will be maintained from 2022 to June 2025. The Government proposed to extend this policy for another 18 months, until the end of 2026, to create conditions for businesses to reduce costs, increase profits and stimulate consumption in the context of reduced purchasing power, especially when the US announced to impose reciprocal taxes on countries, including Vietnam.

Deputy Prime Minister Ho Duc Phoc speaks at the National Assembly Standing Committee meeting on the morning of April 23. Photo: National Assembly Press Center

VAT is an indirect tax levied on final consumers. Unlike other taxes, VAT has the characteristic that the tax burden is shared between businesses and consumers. Therefore, when this tax is reduced, people and businesses will directly reduce consumption and production costs, increase competitiveness and stimulate consumption. According to the Government's calculations, the budget will reduce revenue by about VND 121,740 billion in the second half of 2025 and 2026 when applying an 8% VAT.

Reviewing this content, Mr. Phan Van Mai - Chairman of the Economic and Financial Committee - agreed that it is necessary to maintain the above fiscal policy to support businesses to promote production and business, and stabilize the macro economy. According to him, in the context of the domestic economy facing difficulties, the world has many unpredictable fluctuations... continuing this policy is a measure to focus on domestic consumption, promote production and business.

However, some opinions at the auditing agency said that maintaining the VAT reduction is not appropriate and difficult to achieve the goal of stimulating demand, because the policy has become saturated after a long period of implementation. In the current context, this tax reduction does not guarantee that consumers will directly benefit. In fact, the prices of some goods increase according to input costs, so the VAT reduction is difficult to be reflected in the selling price to consumers.

Along with that, the budget is expected to reduce revenue by VND 39,540 billion in the second half of this year, along with newly incurred expenditures and other revenue reduction policies... which may affect the revenue estimate, budget deficit this year, as well as the 2026 budget plan. Mr. Phan Van Mai proposed that the Government assign agencies to synthesize and evaluate the revenue and expenditure to calculate the budget structure.

"This is very important, the reduction in revenue could be up to hundreds of thousands of billions, and the resulting expenditures are similar, while the annual budget revenue is about 2 million billion VND," Mr. Mai said, asking the Deputy Prime Minister to soon report the data to the National Assembly Standing Committee.

A gas station employee in Ho Chi Minh City fills up fuel for a customer. Photo: Quynh Tran

Responding to this content, Deputy Prime Minister Ho Duc Phoc said the Government will assign the Ministry of Finance to synthesize and report to the National Assembly Standing Committee and the National Assembly. He said that this year budget spending will increase. When streamlining the apparatus, the amount of money paid to officials and civil servants who quit their jobs or retire before the age of full statistics is about 170,000 billion VND. In addition, the State needs to spend 30,000 billion VND to reduce tuition fees, as well as implement a number of new policies such as health insurance, additional benefits, etc.

"This year, the budget can still handle it because the salary payment for laid-off workers and the streamlining of the apparatus will be taken from the Salary Accumulation Fund and spent from the budget," the Deputy Prime Minister informed.

Mr. Phoc added that Vietnam's VAT rate is currently less than half of other countries. For example, in Europe, the VAT rate is around 19-22%. "We only impose a 10% tax, but for the past 4 years, reducing it to 8% is a priority for businesses, helping them recover after the pandemic," Mr. Phoc said.

The draft resolution to reduce VAT by 2% will be submitted to the National Assembly for consideration and approval at the session in May.

Source: https://baohatinh.vn/xang-dau-co-the-duoc-giam-2-thue-vat-toi-het-2026-post286502.html