On the afternoon of November 28, Deputy Prime Minister Ho Duc Phoc presented a report on the draft Resolution of the National Assembly on reducing value added tax (VAT).
According to the Deputy Prime Minister, in 2024, the Government will continue to proactively research, propose to competent authorities as well as issue, according to its authority, solutions to support businesses and people associated with the work of building and assigning annual state budget estimates to ensure the balance of the state budget as well as for localities to be proactive in implementing local budget balance estimates.
Solutions on taxes, fees, charges and land rents have been and are being implemented until the end of 2024 with a support scale of about 191 trillion VND (of which: the amount of extended taxes and land rents is about 95 trillion VND; the amount of reduced taxes, fees and charges is about 96 trillion VND).
The content submitted to the National Assembly this time has the same scope as the Resolutions that have been issued.
That is a 2% reduction in VAT rate, applied to groups of goods and services currently applying a tax rate of 10% (to 8%), except for the following groups of goods and services:
Telecommunications, information technology, financial activities, banking, securities, insurance, real estate business, metals, prefabricated metal products, mining products (excluding coal mining), coke, refined petroleum, chemical products, goods and services subject to special consumption tax.
Regarding the impact, the Deputy Prime Minister said that the expected reduction in state budget revenue in the first 6 months of 2025 is equivalent to about 26.1 trillion VND (about 4.35 trillion VND/month, of which the reduction in domestic revenue is about 2.85 trillion VND/month and the reduction in import revenue is about 1.5 trillion VND/month).
In 2024, the VAT amount reduced according to Resolution No. 110/2023/QH15 and Resolution No. 142/2024/QH15 is estimated at about 49 trillion VND.
Reducing VAT reduces state budget revenue but also stimulates production and promotes business activities, thereby contributing to creating more revenue for the state budget.
According to the Government's submission, the estimated state budget revenue in 2024 is 1,701 trillion VND. Updated to the end of November 14, according to the State Treasury's report, the actual state budget revenue was 1,708.4 trillion VND, equal to 100.4% of the estimate and an increase of 18.3% over the same period in 2023.
Assessing the impact on people and businesses, the report stated that people will directly benefit from this policy, and the 2% reduction in VAT will directly contribute to reducing people's costs in consuming goods and services serving people's lives.
For businesses, a 2% reduction in VAT will contribute to reducing production costs and lowering product prices through businesses that produce and trade goods and provide services that are eligible for VAT reduction, leading to a reduction in the selling price of goods and services for consumers.
This helps businesses increase their competitiveness, consume goods and services, and expand production and business, contributing to creating more jobs for workers.
The 2% VAT reduction is applied from January 1, 2025 to June 30, 2025.
