Proposal to Extend 2% VAT Reduction to Boost Production and Consumption in Vietnam

• The National Assembly discussed a proposal to continue reducing the Value Added Tax (VAT) by 2% to boost production and consumption.
• Deputy Prime Minister Hồ Đức Phớc presented the proposal, highlighting that from 2022 to 2024, the VAT rate for certain goods and services was reduced from 10% to 8%, excluding specific sectors like telecommunications, finance, and real estate.
• The VAT reduction has helped lower production costs, leading to decreased prices for consumers, which in turn stimulates business activity and job creation.
• Despite some positive outcomes, challenges remain, including high production costs and slow domestic purchasing power.
• The proposal aims to further stimulate economic growth by extending the 2% VAT reduction for applicable goods and services from January 1, 2025, to June 30, 2025.
• The Finance and Budget Committee of the National Assembly largely supports the continuation of the VAT reduction policy to encourage consumer spending and support businesses.
• There is consensus on the proposed timeline for the VAT reduction, but some members expressed concerns about the short-term nature of previous VAT policies affecting business planning.

Source: baochinhphu.vn

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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