Continue to propose reducing VAT by 2%
Accordingly, the Ministry of Finance continues to propose a 2% reduction in VAT rates for groups of goods and services currently subject to a tax rate of 10% (to 8%), except for some groups of goods and services: telecommunications, financial activities, banking, securities, insurance, real estate business, metal products, mining products (except coal), goods and services subject to special consumption tax (except gasoline).
This proposal is based on the 2% reduction policy that has been implemented stably in the period from 2022 to present according to Resolution No. 43/2022/QH15, Resolution No. 101/2023/QH15, Resolution No. 110/2023/QH15, Resolution No. 142/2024/QH15, Resolution No. 174/2024/QH15, while ensuring the goal of promoting domestic production, business, tourism and consumption activities and the growth target of the whole country in 2025 of 8% or more.
Strengthening solutions for revenue and expenditure to compensate
Assessing the impact of reducing state budget revenue (NSNN), the Ministry of Finance said that if this policy is approved, the expected reduction in state budget revenue in the last 6 months of 2025 and the whole year of 2026 is equivalent to about 121.74 trillion VND (of which: in the last 6 months of 2025, the reduction is about 39.54 trillion VND, in 2026, the reduction is about 82.2 trillion VND).
It is estimated that in the first 2 months of 2025, the VAT amount reduced according to Resolution No. 174/2024/QH15 is about 8.3 trillion VND.
The reduction of VAT has the impact of reducing state budget revenue but also has the effect of stimulating production and promoting production and business activities, thereby contributing to creating jobs for workers, stabilizing the macro economy and economic growth in the last 6 months of 2025. At the same time, this policy does not affect international commitments.
To compensate for the revenue shortfall due to policy implementation, the Ministry of Finance advises the Government to direct ministries, central and local agencies to focus on implementing tasks, solutions, and fiscal policies according to the Resolutions issued by the National Assembly and the Government to remove difficulties for businesses and people, promote GDP growth drivers in 2025 to reach at least 8% and strive for double digits in more favorable conditions, thereby creating more revenue for the state budget.
The work of collecting state budget revenue needs to be vigorously implemented, strengthened in the fields of management, inspection, examination, administrative procedure reform, promote digital transformation in tax management, especially in key areas and areas: land revenue, real estate transfer, e-commerce activities, and business activities on digital platforms.
At the same time, it is necessary to upgrade the application to stably operate the electronic invoice system nationwide, the Electronic Information Portal system for foreign suppliers, households and individuals doing business to declare and pay taxes from e-commerce activities; expand electronic invoices generated from cash registers in the fields of business, catering services, restaurants, hotels according to chains, petroleum and gold trading; urge collection and increase collection in areas and fields to compensate for the reduced revenue due to policy implementation; apply artificial intelligence (AI), Big Data to support taxpayers, manage tax debts, classify tax refund records... Strive to collect state budget in 2025 about 10% higher than in 2024.
In addition, the management of state budget expenditures needs to be strictly implemented to increase spending savings; proactively use reserves, reserves and other legal resources to spend on natural disaster prevention, control, epidemics and urgent tasks arising according to regulations, ensuring budget balance at all levels.
The current Law on VAT stipulates 2 VAT rates of 5% and 10% (excluding the 0% applied to exported goods and services; subjects not subject to VAT). Tax payable = output VAT - input VAT. Goods and services purchased by business establishments are subject to a tax rate of 10%, 5% or are not subject to VAT. Therefore, for goods and services subject to 5% VAT, the output VAT is basically smaller than the input VAT, so businesses often do not incur the VAT payable.
From July 1, 2025, the Law on VAT No. 48/2024/QH15 dated November 26, 2024, effective, businesses that only produce goods and provide services subject to a VAT rate of 5%, if the input VAT amount has not been fully deducted from VND300 million or more after 12 consecutive months or 4 consecutive quarters, will be refunded VAT. For goods and services subject to 10% VAT, the VAT payable will arise (output VAT is larger than input VAT).
