The Ministry of Justice is reviewing the draft Resolution of the National Assembly on VAT reduction.
The National Assembly's Resolution on VAT reduction clearly stated that from 2022 to the first 6 months of 2025, the National Assembly has issued many resolutions related to VAT reduction.
According to the Ministry of Finance, in 2022, the implementation of the VAT reduction policy under Resolution No. 43/2022/QH15 of the National Assembly has supported businesses and people with a total of about VND51.4 trillion, contributing to the increase in domestic consumption demand, the total retail sales of goods and consumer service revenue in 2022 increased by 19.8% compared to 2021.
By 2023, the 2% VAT reduction under Resolution No. 101/2023/QH in the last 6 months of 2023 has supported businesses and people with a total of about VND23.4 trillion.
In 2023, total retail sales of goods and consumer service revenue increased by 9.6% compared to 2022. Entering 2024, the 2% VAT reduction under Resolution No. 110/2023/QH15 and Resolution No. 142/2024/QH15 has supported businesses and people with a total of about 49 trillion VND.
The reduction of VAT has contributed positively to GDP growth. In 2024, GDP will increase by 7.09% compared to 2023, inflation will be well controlled. Total state budget revenue (NSNN) exceeded the estimate by 19.8% (VND 336.5 trillion), up 16.2% compared to 2023.
To contribute to creating momentum to promote and develop the economy, supporting people and businesses, in order to realize the GDP growth target of 8% or more in 2025, contributing to creating a solid foundation to achieve a double-digit growth rate in the period of 2026 - 2030, it is necessary to continue implementing the VAT reduction policy.
In the draft submission of the Resolution stipulating a 2% reduction in VAT 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).
The 2% VAT reduction will be applied from July 1, 2025 to December 31, 2026.
Although there are many positive impacts, reducing VAT will also directly affect the budget revenue.
This VAT reduction is expected to reduce state budget revenue in the last 6 months of 2025 and the whole year of 2026, equivalent to about 121.74 trillion VND, which is a significant figure while we need resources to invest in development.
However, a 2% reduction in VAT will contribute to directly reducing people's costs in consuming goods and services. People are the main beneficiaries of the direct VAT reduction.
Not only people but also businesses are beneficiaries of this policy. Reducing the VAT rate by 2% for businesses will contribute to reducing production costs, leading to a decrease in the selling price of goods and services to consumers, thereby helping businesses' production increase competitiveness, consumption of goods and services and expand production and business, contributing to creating more jobs for workers.
Sharing with Lao Dong reporter, tax expert, Dr. Nguyen Ngoc Tu - Lecturer at the University of Business and Technology, clearly said that reducing VAT is not only a simple financial policy but also a strategic step.
According to Dr. Tu, this is one of the effective solutions to nurture long-term revenue. Thereby, promoting recovery and sustainable growth for the economy, will help achieve the growth target of 8% or more in 2025, while creating momentum for the implementation of the double-digit growth target in the coming time.
