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| VAT cut applies to goods and services currently subject to a 10 percent tax rate__Photo: VNA |
The Government has recently decided to extend a reduction in value-added tax (VAT) for the next six months, starting from January 1 this year.
The VAT cut to 8 percent from 10 percent, which has been in place since early 2022, was designed to support individuals and businesses in recovering from the impact of COVID-19 pandemic, with the funding now reaching VND 123.8 trillion (USD 4.86 billion).
Under Decree 180/2024/ND-CP, which takes effect from January 1, VAT cut applies to goods and services currently subject to a 10 percent tax rate. However, the regulation excludes specific categories of goods and services, including telecommunications, information technology, financial services, banking, securities, insurance, real estate businesses, metals and prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, and goods and services subject to special consumption tax.
According to the drafting agency, the Ministry of Finance, the extension would result in a budget deficit of around VND 25 trillion, yet it is expected to reduce living expenses, helping people save more and, in turn, stimulate demand and boost consumption.- (VLLF)
